With very few exceptions, everyone resident in Spain (more than 183 days) 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, but must follow a different system to residents.
The cut–off point is 22.000€ in any one year which applies to income from employment and pensions, including those from overseas. This limit fast to 11.200€ under these circumstances:
– The income has not been taxed at source (i.e UK state or private pensions)
– The income comes from more than one source (e.g. two jobs or two pensions or one off each). If the other sources add up to 1.500€ or less you can still use the 22.000€ exemption.
In any case a return becomes obligatory in certain circunstances however low you earnings:
– If you have a claim double taxation
– If you are due a refund
– If you have made pension contributions
– If you are claiming deduction of cost of buying your main residence
– If you have capital gains or income above certain limits.
Remember that it may be in your interest to make a tax return when your earnings are low, for example if you have worked for only part of the year and may therefore be due a rebate. Also there are advantages of being fiscally resident in Spain.
Failure to pay tax can result in penalties of between 50% and 150% of the tax owed, plus interest. Late payment can result in penalties 5% to 20% of the tax involved, plus interest.
Non-Resident income tax liability
Non-residents are liable for tax on any income arising in Spain, such as a money deposit with Spanish bank, a property in Spain, or income derived of any business in Spain.
Property owners are taxed on their property income. The tax base is the property cadastral value (valor catastral), which can be found on any IBI (in Alicante providence SUMA bill) Should you fail to pay this tax, you will be charged and penalized by the Spanish Tax Agency if you try to sell your property.
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