Spanish Taxes for Non-Residents
Modelo 210 or multipurpose form for nonresidents.
We all know that non-residents in Spain have to declare and pay tax with Form 210, but when you begin to fill it out, you realize that it serves many totally different situations and that is why we call it the multipurpose model and that makes it a little confusing …
The only thing that counts is that, if you have any type of income originating in Spain, you have to file Modelo 210 and pay the corresponding taxes. In general, if you are a EU resident, the tax rate is 19% and if you are not from the EU, the applicable rate is 24%.
There are fundamentally four completely different cases in which we are forced to use the modelo 210:
If you have income from work
In general, this is the case of employees who come to Spain and their stay in a natural year does not reach 183 days. This is the case of foreign teachers who arrive in Spain to join a school in September to teach; until December they are considered (fiscaly) non-residents and therefore have a payroll withholding of 19% or 24% on gross income. If the company for which they work applies correctly the withholdings, they will not have the obligation to file 210 but if the company applies the withholdings incorrectly, either by excess or by default, then they will have to file it. In the event that the result of 210 is a refund, the period to file will be the entire following calendar year. In the event that it is to pay, it must be submitted quarterly.
From the month of January and if more than 183 days pass in that calendar year and therefore they are considered tax residents in Spain and they will have a payroll with the withholdings corresponding to their annual salary, and they will present the regular Individual Income Tax Return to pay their taxes like any other tax resident.
If you have income from a rental
In this case, Modelo 210 must be submitted quarterly and the tax data of the tenant and even the property’s cadastral reference cannot be missed. As in the previous case, you have to pay 19% for the fall of EU residents on the net income (income minus expenses) and 24% for non-EU residents on the gross rental income, without the possibility of deduct any expenses.
If you don’t rent the house that you own
In the case of properties that are not leased, the tax payable will be calculated on 1.1% of the property’s cadastral value, applying the 19/24% rates. This declaration must be submitted during the following year, from January to December.
Gains derived from the sale of real estate
The gains derived from the sale of a property in Spain by a non-resident (transmission value less acquisition). The applicable tax rate is 19% and will be declared in the 4 months following the transmission.
Penalties of Modelo 210
The penalties for filing late Modelo 210 without prior request by the Administration will be 5% if the delay is 3 months; 10% 6 months; 15% up to 12 months; and 20% plus interest if it is more than 12 months.
In the event that it is the Administration that claims it, the penalties will be approximately € 175 if the result of the declaration is zero and between 50% and 100% of the unpaid fee.
Special Spanish tax for foreigners working on assignment – Beckham Law
There is a special tax regime for foreigners coming to work in Spain on an employment contract with a Spanish company. This is sometimes known as ‘Beckham’s Law’ as it was allegedly set up so that soccer player David Beckham did not have to pay tax on his worldwide image rights when he came to play for Real Madrid in 2003.
Under this special regimen employment income will be taxed at a flat rate of 24%. The 24% tax rate applies to employment income up to €600,000 the excess will be taxed at the 45% tax rate. Spanish source capital income and capital gains will be taxed at flat tax rates, the first €6,000 € at a 19%, from €6,000 to €50,000 at a 21% and from €50,000 € at a 23% tax rate. Non-Spanish source capital income and capital gains will not be taxed. The 24% tax rate will be withheld monthly by the Company from your gross salary. Additionally, there is an obligation to file an annual tax return between April and June of the following year. Then you must file annualy Modelo 151
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