Spanish Income Tax Q & A

Here are some commonly asked questions about Spanish income tax which might help you with the basics. You may also be interested in our page Spanish income tax rates 2010.

We operate a free query service for during tax season (email This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) but note that priority will be given to clients during a busy time for us.

Learn more about our fixed fee tax filing service here.

Who has to make a Spanish tax declaration?

With very few exceptions, anyone resident in Spain for tax purposes and with any income or capital gains anywhere in the world has to file a tax return. Non resident property owners are also obliged to file tax returns (see separate page for non resident tax return information).

What are the exceptions?

In the first year of your tax residency there are no exceptions, even if you have no income you must file a declaration to that effect. Subsequently if your income from all sources is less than €8.000 you can normally avoid having to file but there are other conditions, e.g. no more than €1.600 of investment income and €1.000 of rental income. Also if you are an employee earning less than €22.000 and have no other sources of income, you will not have to file a return (lower rate tax will already have been deducted from your salary). Finally if you receive a pension from abroad that has already been taxed there you may be exempt depending on the terms of the tax treaty between Spain and the relevant country.

To clarify your position further take a look at our guide Do you need to do a Spanish tax return?

When do I become tax resident?

The short answer is that living longer than 183 days in Spain (including occasional trips out of the country) during any one calendar year makes you tax resident but so too can basing your family and/or business interests in Spain, even if you yourself are absent. Note that failing to declare that you are resident for tax purposes does not alter the fact that you are in fact tax resident and liable to be taxed accordingly. Do not confuse obtaining a Spanish residency certificate with tax residency; this shows you are on the register of resident foreigners kept by the Police and does not equate to tax residency although the tax authorities who may see it as evidence that you are tax resident if it is ever a matter of dispute.

When do I file a return?

You should register your tax resident status with the Spanish tax authorities (La Agencia Tributaria) as soon as you become tax resident. Theoretically this is as soon as you are settled with the intention of staying more than 183 days but certainly after this period is up. There is a simple declaration called Modelo 30 (download here) which you complete, sign and take to your local tax office. If you want Advoco or another tax adviser to become your fiscal representative this is the time to appoint them. The fiscal representative will file the declaration on your behalf with their details on the form so that all communications from the Tax Office go directly to them. The first return will be made between May and the end of June during the year following the first year of tax residency.

What gets taxed?

Worldwide income and capital gains. So for the declarations residents are making in May/June 2010 they will need to include, from the 2009 calendar year:

What deductions are available?

There are many and varied credits and exemptions but the main ones are:

• * Credit is given for all tax deducted at source whether this be in Spain (e.g. “retenciones” deducted by banks on interest or employers on salaries) or abroad, if there is a tax treaty in force.

• * Any payments into the Social Security system are deductible.

• * There are important deductions allowable in the calculation of rental income – for residents but not non residents – and capital gains on property sales.

• * There are deductions for your main residence (see below)

• * Pension contributions are tax deductible (subject to limits)

• * The first €1.500 of dividend income is tax exempt.

• * As a crisis measure the government introduced a €400 tax credit for all employees and self-employed persons in 2009. This is to be abolished from 2010.

  Housing deductions

  Unlike the UK which did away with MIRAS (tax relief on your mortgage) years ago, Spain has some generous deductions for housing costs, although the authorities are threatening to water them down. The main ones are:

  - the cost of buying, renovating or extending your main residence

  - the costs of financing your house (mortgage)

  - rent of your main residence but only if you earn less than 24.020€

  The amount of the deduction can be a fairly complicated calculation but in general a maximum of 9.015€ mortgage costs can be offset against income at a rate of 15% and a similar amount of rent at 10.05%. Each autonomous community can add other deductions (e.g. Andalucia allows under 35 year olds to claim more for their rent than the national allowance)

  What about charity?

  Donations to charity are tax deductible in Spain. If the charity is recognised as an official charitable body then you are allowed to deduct 25% of your total donations from your tax bill i.e. your tax bill is directly reduced - it is not a deduction from taxable income.

  One condition is that you must produce a certificate from the charity concerned showing that the donation was made. Most charitable bodies hand out certificates to regular donors automatically.

  There is also an unusual feature of Spanish tax law that allows you to divert a small proportion (0,7%) of your tax to good causes (fines sociales) or to the Catholic Church. You just tick a box on the tax return and they will benefit from your action without you paying any more tax. In fact you can tick both boxes. Here is an explanation:

  http://www.marcafinessociales.org/informate/detalles/01_que_es.html

What tax rates are payable?

Every taxpayer has a personal or family allowance that is taxed at 0%. Starting at a basic €5.151 for 2009 (payable in 2010) the allowances rise depending on age, children, disabilities and other factors.

After this the tax rate begins at 24% for income up to €17.707 and rises to 43% beyond €53.407.

Do couples submit joint returns?

They can either submit a joint return or file separate returns. Your tax adviser will calculate the most beneficial option doing two separate calculations of the tax due if necessary.

When is it due?

The declaration must be filed by the 30^th June during the year following the relevant tax year thus in 2010 everyone will be filing their 2009 tax returns beginning in around May. The tax is payable by the 30^th June also. Normally the taxpayer’s bank details are included on the declaration and the tax automatically taken from their account.

What if I don’t pay?

Failure to pay tax can result in penalties between 50-150% of the tax owed plus interest. Late payment can result in penalties between 5-20% of the tax involved plus interest.  There is a full guide on this website Spanish Tax late reporting and fines

What should I do if I am behind with my taxes?

If you think you should have been regsitered to pay tax in Spain or are registered but are late with your returns, then contact us for some advice. Depending on the situation you could be able to put things right quite easily and cheaply and it will certainly be better to take the initiative yourself than wait for the tax authorities to come to you.  Note that there is a statute of limitations of four years after which unpaid taxes cannot be collected by the Agencia Tributaria (unless they have already made a claim for the tax).

If you have any further questions, require clarification on any point or you would like to discuss our services, please contact James Baker. He is a UK chartered accountant now registered inSpain. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Non resident property owners should submit Spanish tax form 210

2009 taxes must be declared and paid before the end of 2010. A rather irritating quirk of Spanish tax law means that non resident owners of property in Spain have to pay Spanish income tax even if they in fact have no Spanish earnings such as rental income. Here we offer our services and offer some guidance for anyone trying to sort out their tax forms themselves. Tax advice and services for residents are here.

ADVOCO will calculate, declare and pay your 2008 tax for 30€ **

** plus VAT. 10€ extra for each additional return on the same property. You can pay us in either Spain or the UK, in € or £.

How does the service work?

1. Send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it asking us to do your tax or asking for more information

2. We will exchange emails with you to get the information we need to complete the forms

3. You pay our fee and we file the declaration on your behalf

Questions and Answers

I think I may have paid this.  How can I tell?

This non resident tax issue can be confusing.  Why should owning a holiday home entail paying income tax?  There is no equivalent in the UK, and no one from the government informs non residents of their obligation to pay the tax and submit the form.  In fact a lot of holiday home owners are oblivious to the requirement or think they already paid.

This is because they have paid local property taxes: Impuestos sobre Bienes Inmeubles ("IBI").  But this is a second tax that has to be paid apart from the Form 210 income tax.  It is paid by all property owners, residents and non residents alike, and it is set and collected by the town hall, very like council tax in the UK.  It is usually collected every Autumn and you get the amount on an IBI statement through the post

So if you are a typical holiday home owner, the question to ask yourself is have I paid both my local (IBI) taxes to the town hall and my income tax to the national government (Form 214)?

What if I don't submit a form and pay the tax?

The government doesn't force payment of the income tax element and may people don't hear about it and fulfil their obligation to declare and pay it.  Initially there may be no adverse consequences but the local tax office (the Agencia Tributaria for your are) know the status of all properties from the IBI and other records and know whether they are owned and occupied.  It is a simple task for them to identify which property owners are (a) non resident and (b) not declaring their taxes.

That said many people go years without being caught up in tax office investigations.  The problem often only rises to the surface when non residents come to sell their properties.  In this case the seller is obliged to pay 3% of the sale price to the tax office which is only recoverable by the non resident seller when they are up to date on taxes including capital gains tax on the sale and, increasingly, the form 210 tax.  This may then require multiple form 210s to be submitted going back several years with fines and penalties.

What if I have to catch up back year taxes?

You can easily catch up on old years with unpaid taxes on but there are interest costs and penalties (see our report Spanish late reporting fines).  Before 2008 the tax was higher as well because Spain had not yet abolished their "wealth tax".  On the plus side there is a statute of limitations that applies to unpaid Spanish tax which means that tax is not collectable after four years.  If you want advice on the costs and implications of unpaid taxes including back years, send us an email.  It may not be as painful as you think.

How does the tax get paid?

Assuming you have a Spanish bank account with sufficient funds to pay the tax, we will include your bank details on the form so the authorities can deduct the payment automatically.

If you do not have a Spanish bank account you can pay us the money necessary to settle the tax when you pay our fee and we will pay the tax for you. You can even pay us in sterling from your UK account to our UK account. We charge 5€ extra for this service.

Can I do it myself?

Probably. The calculation of the tax is very simple (see below). Payment is quite easy too as you can either set up a direct debit or take your completed form 210 into the bank and pay it there. You can get the form off the Tax Office website here:

Spanish tax form 210 download

With a reasonable level of Spanish you will be able to work through it (there are instructions on the link).

How much is the tax?

The tax is calculated as 24% of the “income” the Spanish authorities deem you could make renting out the property. This is calculated as 2% of the rateable value (reduced to 1,1% for areas re-rated after 1994). If you only owned the house for part of the year the tax is pro-rated down to the period of ownership. If there are multiple owners (e.g. husband and wife) they pay an equal share of the total tax but must each submit a return. The rateable value is the “valor catastral” found on the IBI (rates) bill you get every autumn.

When is it payable?

You must make your return for a given year by the end of the following year, so for the 2009 tax year, you should declare and pay before 31/12/2010.

My lawyer takes care of this. Is that OK?

Most law firms offering conveyancing services to foreign property buyers will then offer to become a “fiscal representative” taking care of all related tax affairs. That is fine except that having a fiscal representative is not really necessary if you have simple tax affairs and can be expensive. Advoco offers a representative service for those who need it for 80€ but many firms charge double this or more. Most people would be better off paying just for the forms to be filed and not have a representative.

What should I do?

If your situation is simple i.e. you own one property which you do not rent out and have no other complications, then you might want to consider doing the tax return yourself or using Advoco’s 30€ offer.

Stick with your fiscal representative if you think they are worth the annual fee e.g. because they offer valuable advice as well as filing the return or because your affairs are more complicated than the standard holiday property owner. An example of this might be if you rent out your property for part of the year which involves a lot more in the way of reporting (see below). Note that residents of countries without a Spanish tax treaty must have a fiscal representative if they own property in Spain. Most countries, like the UK, have treaties with Spain but tax havens like Gibraltar and some other territories do not.

Am I resident or non resident?

A pretty easy question to answer for most of us: if you have a holiday home in Spain which you use periodically but actually live in your home country and pay taxes there you are non resident for this purpose. If you live in Spain and only occasionally return to your home country where you have cut most ties then you are more than likely tax resident in Spain and should register as such. Note that failing to register as tax resident does not stop you becoming liable for Spanish resident taxes!

Of course there may situations which are not so clear cut e.g. during a transitional year when you are settling in Spain. The rule of thumb is that spending over half the year in one country makes you tax resident but there are a lot of subtleties and variations. Where your family or business is based can be a factor. If you require clarification contact Advoco.

What if I do rent the house out?

The Advoco offer only applies to the simplest of returns where the only income is imputed rent, not actual rental income. Non residents who rent out their property should declare the income filing a Form 210 and paying 24% tax without deductions within a month of receiving each payment or when a payment falls due, whichever is earlier. In practice most non resident property owners take advantage of the quarterly reporting option using Form 215. Advoco’s fiscal representative service covers this reporting.

If you have any further questions, require clarification on any point or you would like to discuss our services, please contact James Baker. He is a UK chartered accountant now registered and working in Spain. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it