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Accounts, Insurance & Finance Department
GB Abogados´accounts, insurance and finance department offers a tailored service for non resident clients. Our qualified accountants are on hand to provide expert advice in English.
GB offer a wide range of accountancy services to cover all manner of circumstances; you may be a non resident in Spain or planning to move to the country.
Either way we can assist.
GB also provide services to self employed individuals and companies of all sizes. Our accountants are well versed in the requirements of UK companies with holdings or branches in Spain.
Our website provides an overview of the most common requirements.
Please don´t hesitate to contact us for a no-obligation consultation.
Corporate clients can visit our dedicated corporate law site here.
Annual Tax Return
The Spanish Tax Year is the same as the calendar year. The tax system is based on self-assessment. This can be challenging and so it is important for non-residents to have a financial adviser in Spain. All property owners in Spain must submit a tax return regardless as to whether the property is rented out or not.
GB Abogados represent your interests and we will ensure that your tax obligations are always met in a timely manner, with the bestvalue for money service. We also provide you with up to date information of any changes in the regulations, planning your tax obligations so that you have the security and peace of mind that everything is in order, including checking the previous 4 years tax declarations for which you are liable.
Non-residents are often unaware of their tax obligations to the Spanish State. Taxes should be met regularly, as any breach can lead to many problems in the future (in particular economic sanctions).
The Law 26/2014 and Decreto Legislativo 5/2004 contain everything to do with the rules governing income tax for non-residents (IRNR). In addition, some taxpayers may be subject to other taxes depending on the cause of the taxable event, such as:
- Property Transfer and Stamp Duty Tax
- Value Added Tax
- Property Tax (I.B.I)
- Inheritance and Gift Tax
- It is most important to know the taxes which can affect the vast majority of non-residents (whether individuals or commercial entities) and know what the consequences of failure to comply with those obligations to the Tax
- Authority (AEAT) would be.
Income Tax Law
The tax authority in the Income Tax Law 35/2006 section 9 states the definition of resident in the national territory, as opposed to those who are non-residents:
You are considered a tax resident if you remain within the national territory for more than 183 days in a calendar year, with some clarifications.
That the nucleus or base of activities, or economic interests is in Spanish territory. Presumed to be atax resident if residing in national territory with spouse, and/or minor dependent(s) child(ren).
Therefore, those who do not meet the above requirements will be considered non-residents. The most common forms of income that the Non-Resident must declare to the Spanish authority are:
a) Property Tax: it is a local recurring tax payable each year and levied on the value of urban property, rural property or goods with special characteristics. The party obliged to pay is the owner of the property on 1st January regardless of when the tax invoice is issued each year. Obligation: must pay the tax debt in the period determined by the location of your property and the local authorities. For example, if the house is located in Torrevieja you must pay tax before October 2 of each year; whereas if the property is located in Alicante, the tax must be paid on or before the 3rd June, etc.
b) Income allocations for those with a property in Spain the tax authority considers that there are earnings made by the mere fact a second home/property is owned in Spain. The assumption is that a second home has the capacity to generate return by increasing in value over time, or due to the possibility of obtaining income from rental, this is irrespective of whether the property is actually let or not. Liabilities: Non-residents are required to file an annual declaration and payment of tax due before December 31 of each year. Otherwise, the tax debt remains outstanding with the respective interest and surcharges accumulating until further transmission by sale or inheritance.
c) Returns on Real Estate for those who obtain income from the lease of real estate property where the tenants are not retainers (as individuals who are not engaged in economic activity). Duties: must be declared quarterly by the 20th of the months of April, July, October and January.
d) Capital gains calculated accosding to by the transfer of immovable generated by the positive difference between the acquisition value and transfer value. There are partial exemptions in certain cases of 50% (the discount applies if the property sold was acquired between May 12, 2012 and December 31, 2012) and a reduction is established if the property was sold before 31 December 2014 depending on the year the property was purchased.
Transitional regime: If you purchased the property before 31st December 1994 the Capital Gains will be reduced thanks to the application of some specific rules. There is also an exemption for reinvestment of property in the EU, Iceland or Norway.
Obligations: this transmission must be declared within 3 months following the end of the month in which the property is conveyed. If you have questions regarding your tax liabilities in Spain, or any other Tax related issue, please don ́t hesitate to contact us.
We are offering a unique Notification service to all our clients which is invaluable if you are away from your official Spanish address for any period of time.
This service allows us to receive all official notifications from 38 different entities in Spain. The Revenue Authority, Social Security, Traffic Department, Extranjería (for foreign nationals), and the Ministry of Justice are just a few of the agencies from whom we can receive notifications.
This service will mean that you never miss an important notification from the authorities again.
Ordinarily Public notices are posted on bulletin boards, in the official press, or sent to you by letter to your official address in Spain to inform you of your Tax liabilities, Traffic taxes and violations, any Court notifications etc.
There is always a set period of time to respond (either pay your dues or contest a claim) which is often missed when a notification is not received on time or overlooked.
If you have a mortgage in Spain that you have defaulted on your lender may have initiated legal actions.
In this case an official notification from Court and a copy of the Lawsuit against you will be sent to the Spanish property mentioned in the mortgage, and not any UK address provided to your Bank Branch for communications, as per the Spanish Law.
We find that many people who have difficulty paying the mortgage on their second home seldom visit the property and so miss anyimportant documentation.
They only become aware of the gravity of the situation when they are pursued in their home nation for any mortgage shortfall.
Our notification service means you need never find yourself in a similar situation.
For more information on how our service could benefit you please contact our team for a no obligation consultation.
Self Employed (AUTONOMO) Tax Returns
Self-employed or autonomos (whether professionals or businessmen) must comply with all the legal obligations and submit periodic declarations as per the rule of law provided, and do so in a timely manner.
We know that most people find doing their Tax return boring or a struggle, so we offer a full service assisting with filing all declarations including the quarterly IVA declarations which leaves you free to do what you do best.
For information on how we can help you please contact our team.
Landlord Tourism Licences
What is it?
The holiday rental licence law in Spain is made as an attempt to set minimum standards, regulate the industry and organise the tax collection in the trade.
There is an estimated € 3 billion in non-declared earnings made every year from this type of rental.
This control also tries to prevent for the natural resources of the country, coasts, beaches, forests, etc. to be overexploited and thus damaged.
Under the tourism licence banner, this regulation includes the rentals of apartments, flats and villas near or on the coast, as well as rural homes.
Who needs a licence?
The regulation ensures it is mandatory to all landlords or proprietors of such units who aim to rent it out, to ensure that the properties are registered as a short term rental property.
The owners must comply with minimum standards, of dwelling, hygiene and safety, pay all relevant fees and make the property available for inspection.
To complicate matters, the regulation of tourism licences belongs to each of the regions of Spain, not to the central Government.
Therefore, there is not one set of rules, but rather seventeen (as many as regions with the capacity to pass laws in Spain).
This ensures, for instance, that three well known holiday regions, Alicante, Murcia and Almería, next to each other along the coast, belong to different regions.
What are the requirements?
A home owner of a property in Spain wishing to rent it out as holiday / short term home, must go through the following process (subject to minor specifications in each region):
Registration at the relevant touristic office of the region (where the property is). This includes to complete the relevant forms, payment of application fees, give evidence of ownership, etc.
Cooperate with the authority and make sure the property is in compliance with the law requisites, displaying safety signs at the property, allowing the inspectors an initial review and measurement of the property, etc.
Register the income / rentals with the tax office.
To ensure the standards and criteria of the licence are kept at the property. Also, that a minimum of emergency contact numbers (firemen, ambulance, police) are held visible at all times in the unit rented.
Allow for routine or special inspections, and notify of refurbishments or changes in the property.
Payment of monthly, quarterly and / or yearly fees.
Keep a specific insurance for the property (apart from the home insurance) which is the public liability insurance.
Once a property is authorised as suitable for rental a registration number is assigned to the property.
This number must be entered and displayed in all documents, advertising, safety signs and correspondence with the authorities.
If you own or are considering buying a property and would like assistance with your application, please don´t hesitate to contact us.
Company Tax Services
For clients who are setting up a business in Spain, GB Abogados offer a complete service, from the registration of the business at the Tax Office (Agencia Tributaria) to the completion and filing of quarterly VAT (IVA) and annual tax returns, standard bookkeeping and accounts preparation services.
Our experienced team of professionals can oversee the formation of your Spanish Company and register the new business for tax and social security.
We assist with tax planning for individuals and small businesses.
Like those with an Autonomy (self employed individual) status, employers are required to meet certain tax obligations under the Tax Code and Royal Decree 1065/2007 which regulates the general regulation of the activities of tax management and inspection and development of common standards and management procedures inspection.
These obligations may be monetary, ie, the payment of tax liability (Article 19 LGT), the financial obligation to make account payments (art.23 LGT), the obligation arising between individuals resulting from tax such as the duty to retain or enter legally foreseen account (art.24 LGT, accessory obligations (interest shall be meet, extemporaneous statement charges and surcharges of the executive period art.25 LGT).
On the other hand, formal obligations, contained in LGT and the Art.29
These include the obligation to apply for and use tax numbers on the tax nature relationships, deliver and maintain invoices, bringing the adjusted accounting code of Commerce etc. … to be periodically met as determined by the respective standard.
In the field of European Union and European Economic Area, the Tax Authority has signed tax treaties with other member states to avoid double taxation.
Therefore the above yields should be taxed in the Non-resident country (i.e. Spain), but there is also the option to pay the tax due in the home country of residence.
Our accountants can advise on the best course of action for you and your business according to the relevant rules and regulations.
It is necessary to have your interests represented by a legal professional when dealing with the treasury, particularly when operating by EP (Permanent Establishment, i.e. a branch-subsidiary).
When due to the value or characteristics of the income obtained in the Spanish territory, it is so determined by the tax authority.
In the cases of supplies of services, technical assistance, installation or assembly works derived from engineering contracts and, in general, economic or professional activities without the mediation of EP.
Entities under an imputed income constituted abroad.
People or entities resident in countries with which there is no effective exchange of information.
If you are interested in setting up a business in Spain, expanding a pre-existing business into the Spanish territories, or looking for independent tax advice for your company, please contact our team today.
Other Tax Services
Other Accountancy services we offer:
Negotiation of Tax Debt
If you have incurred a large Tax debt as either an individual or Company we can assist with negotiating with the authorities to reduce the debt and manage the payments.
It is important to tackle these type of problems head on to avoid further issues in the future. The tax authorities frequently add additional fines and penalty fees to outstanding balances.
More and more frequently, individuals are pursued in their country of residence, as the cooperation amongst EU member states increases.
If you are interested in these or any other services please contact our team today.
When a property is sold by a Non-Resident the authorities automatically retain 3% of the value of the sale in case there are any outstanding Taxes or charges.
In most cases the Non-Resident selling their property has remained up to date with their Non-resident tax returns and so there are no outstanding arrears and the 3% is returned.
We offer the service of processing the application for the return of the funds which are then deposited directly in to your Bank account by the Spanish authorities.