Non resident bank accounts. Certificate of non residency

Spanish banks can open  bank accounts in the name of  resident or non resident person.  In case of a non residents, the banks require  that the clients prove that they are not resident  in Spain by the obtention of a certificate of non residency from the local police station.

A Spanish non resident bank account is  in most cases tax exempt in Spain, any interest received  by a  non residents  shall be taxed  in the country of residence.

If you have a non-resident bank account in Spain, your bank will contact you every two years to confirm that your status as a non-resident remains the same. If it does, they normally apply on your behalf for a non-resident certificate, if you have given them the necessary authorisation and charge you a fee  for this service. It is essential that you check with your bank whether this is an authomatic process or if you need to apply for this personally.

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If you have to apply for the certificate yourself, the application procedure for a Non Resident Certificate  is very similar to the one for the NIE ( Number of Identification of Foreigners). You have to go to your nearest Police station with your passport and a full copy of same , fill in a form  and  pay  the corresponding rates . The certificate has  to be  collected a few days after the application has been presented

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Sale of permanent residence. Discrimination between residents and non residents

In order to insist on the subject of  the existence of possible tax discimination between  Spanish Residents and Non Residents,  we would like to comment that Spains was also  referred to the EU's Court of Justice for discriminatory rules that prevent non-residents from enjoying the same tax benefits as residents in case of the sale of a Real Estate property.

For Spanish residents, capital gains from the sale of a permanent residence are tax  exempt if the money is used to buy another permanent residence in Spain. However, if a person living in Spain  sells his permanent  residence and buys   a new house in another Member State where he has moved to,  thus changing his status to Spanish non resident, he is taxed on the capital gains made on the sale. If he would have stayed in Spain and bought a new house there,  no tax would have become due. Spanish  non-residents  in this situation end up paying much higher taxes.

This is a violation of the free movement of persons and therefore a breach of the EU Treaties.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Possible tax discrimination between residents and non residents in Spain

The European Commission is pressing Spain again to avoid any possible discrimination regarding taxes between Spanish residents and Spanish non residents, members of the EU. At the time this was the reason for the change in the capital gains tax rate for non residents to match that of the residents. Finally the Spanish legislation was adapted and the same rate is applicable to both.

In the case of Inheritance and Gift tax, there is a similar situation, Spanish non residents of certain regions pay much higher rates than residents and thus the European Commission has denounced this before the European Court of Justice. This tax discrimination is contrary to European Law because it goes against one of the fundamental freedoms of the EU Treaty: the free movement of persons and capital.

The situation is complex as this tax is not only regulated by the Spanish State but also by regional bodies (Autonomous Government) and the tax to be paid even by Spanish residents varies considerably depending in which community they live. Most of the Spanish regions have implemented amendments to the general State regulations and their resident tax payers, i.e. persons who receive an estate within their boundaries have to pay a lower inheritance tax.  At present the Spanish non residents are taxed according to the main State regulations, thus the amendments introduced by the regional bodies are not applicable to them. Therefore in order to avoid discrimination, any non resident should also benefit from any tax allowance based on the regulations established by the Autonomous Government where his property is located.

Until the necessary amendments are made by the Spanish government to adapt the legislation and avoid the tax discrimination any UE non resident who pays inheritance tax liabilities at a higher rate than a Spanish resident can claim the refund of the surplus tax paid based on the existence of discrimination in the tax treatment. This is also applicable to any inheritance tax paid in the last four years, but every case has to be analyzed carefully and individually, as the regulations applicable differ from one Autonomous Government to another. Summarizing both residents and non residents should receive the same tax treatment and thus  the regulations applicable have to be compared when arranging for the payment of the tax to establish the existence of a possible discrimination.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Why do we strongly advise that you present your non resident income tax assessment for the use of your own property on time? Deadline Income Tax 2012: 30th December, 2013.

If you are non resident and own a property in Spain you must present annually the income tax assessment for the use of your own property.  This is sometimes difficult to understand by the non resident who is normally aware that income tax has to be paid if the property is let but cannot understand that tax has to be paid if no rent is received.

However, for your peace of mind the same rule is applicable to the Spanish residents. They have to pay income tax for the use of their own properties with the exception of their permanent residence. In case of a non resident the property in Spain would be always a second residence.

Nowadays, a lot of official bodies have the data computerised and the tax office is updating the information relating to non resident owners of properties. Also when you come to sell the property the tax office will be given details of your purchase. The purchaser in case of a sale by a non resident has to retain 3 % of the purchase price to be paid directly to the tax office on account of the capital gains tax of the vendor  and when presenting the assessment and effecting payment has to  provide information about the transaction.  At this stage the tax office will revise your tax situation as vendor and will claim payment of any tax due with surcharges, interests and penalties.

In the present economical circumstances most transactions generate no capital gains but a loss and when you present your capital gains tax declaration  you will apply for the refund of the 3% of the sales price paid on account of the Capital Gains by the purchaser. However, if you have not presented the income tax assessment for past years, the refund will be stopped until you regularise your tax situation.

For your information in 2013 the tax office can still enforce payment of the income tax declarations for the years 2008-2011 and if these have not been paid they can render assessments with fines, interests and surcharges.

Therefore in order to avoid payment of extra money in surcharges, interests and penalties and effect payment of the tax for various years in one lump sum of money, we strongly advise that you arrange for the payment of the tax annually in the due date.

At present you are still in time to present the income tax declaration for 2012. Deadline for this is the 30^th of December 2013.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Implications of being Spanish tax resident.

If you are tax resident in Spain you will have to pay tax on your worldwide income in Spain (Income tax) and your worldwide assets (wealth tax), i.e.  not only for the income and assets located in Spain as applicable to non – residents. Also the   periods for the presentation of the tax assessments vary; residents must present declarations in June and May each year for the past fiscal exercise.

Also since 2012 any resident has to present an informative tax declaration (Modelo 720)  with detailed information about assets located abroad.  This information will be compared by the tax office with that declared in the annual wealth and income tax declarations to check that no information    has been omitted   and the tax paid has been worked out correctly.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Applications For The Payment Of Local Taxes 2014 In Instalments Must Be Made Before 31.12.2013

For those who live in the Malaga area and the local taxes (Local rates, refuse collection charge, car tax) are being paid through the “Patronato de Recaudación Provincial”  you have the alternative to  pay the future receipts in instalments  without interest. You can either decide to do this with  only one of the receipts, maybe local rates which is the one that has increased considerably in the last years,  or decide  that all of them should be  added together and  payment effected  gradually.  This is  a service that is being offered  and which may be of interest for  you to avoid to face a  big one-time payment of any of the  receipts.

A direct debit will have to be arranged for the payment of the receipts and the alternatives you have are as follows :

Payment in two instalments:  April and October.

Payment in three instalments: April, July and October.

Payment in eleven instalments : January to November.

This can be applied for by Internet at www.prpmalaga.es, by phone 902 152 000 or at any office of the “Patronato de Recaudación Provincial“. If you wish to pay as usual,  i.e.  each receipt in its statutory period, no action has to be taken.

Just keep in mind that for the 2014  receipts this has to be applied for before 31.12.2013 and will be valid for the following years unless you apply for a different alternative or the receipts are not  paid.


For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com

Important issue before payment of any tax in Spain.

¿When are you by law considered to be a tax resident in Spain?

You are a Spanish tax resident if you spend more than 183 days in Spain during one year (1st of January to 31st of December).  When establishing this term short periods of absence from Spain are not taken into account, unless you can prove that you live for more than 183 days in another country.

Having a residence permit in principle is evidence that you intend to stay in Spain and pay taxes here but not having this document does not prove your non-residency for tax purposes.

Also the tax office presumes that you are a Spanish resident if your centre of vital interest is located in Spain or if your spouse and children of minor age live in this country, unless you are legally separated or you can prove that you are tax resident in another country. Normally the way to prove in these cases that you are non resident for tax purposes in Spain is by way of a Certificate issued by the Tax office of your country of residence confirming that you are resident for tax purposes in such country.

On the contrary if you do not comply with any of the above you will be considered as a Spanish non resident from a tax point of view.

For more information or an appointment please contact us on (0034) 952 822 321 or admin@nonresidenttaxesinspain.com. 
Web: www.nonresidenttaxesinspain.com