HomeAway, AirBnb and other property portals and estate agencies have been busy informing their clients they will disclose all their tax details over to the Spanish Tax Office in 2019, retroactively as from the 1st of Jnauary 2018. Are you up to date with your Spanish taxes? Have you been declaring and paying tax in Spain on your rental income? We file taxes all over Spain.
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By Raymundo Larraín Nesbitt
Lawyer – Abogado
7th of January 2019
You may have received last December 2018 an email from your property portal or estate agency similar to this one.
Property portals have been scrambling to send frantic emails over the last month to expat clients (‘hosts’, in their terminology) informing them that going forward they will be passing on all their tax details over to the Spanish Tax Authorities as from the 1st of January 2019. They will request you complete a tax form that will be relayed over to the tax office. If you fail to comply, you will no longer be allowed to do business with them.
So what does all this even mean? It means that estate agents and property portals have been forced to turn into whistleblowers reporting all your rental income under threat of heavy fines.
The reason is because new tax laws now force estate agents and property portals to pass on all your (rental) tax details over to the Spanish Tax Office under threat of humongous fines up to €600,000. Property portals and agents must submit a new quarterly tax form (number 179) to the tax Authorities with very detailed information on all their client’s rentals. If you have been renting out in Spain your property over the last year, and have not declared and paid tax on your income, chances are the tax office already knows about it and you are going to be fined.
The details passed on to the tax Authorities will be retroactive as from the 1st of January 2018. However, this does not preclude the fact that the Spanish Tax Office is entitled to collect taxes going back four years (statute of limitations).
In Spain, when you rent out a property you are taxed at source.
In other words, you need to declare and pay taxes on your rental income in Spain, not elsewhere i.e. in your home country. Depending on whether there is a double taxation treaty in force with your home country (i.e. such as with the UK and the RoI), your national tax office will give you tax breaks on the tax you have already paid in Spain.
On being non-resident and owning property in Spain, you are liable for the following two taxes:
The most interesting part of our taxation service is that if you are EU-resident we can bring down your tax bill by an average of 70%. Ask us.
We offer two different taxation services which are very competitively priced. The service is provided always by native English-speaking lawyers and economists.
Fines for non-payment of tax on rental income range from 50 to 150% of the undeclared amounts, plus delay interests.
Any unpaid tax can be placed as a charge against your Spanish property.
If you are not up to date with your Spanish taxation, don’t procrastinate any longer; contact us ASAP and see how we can help you out. Be pro-active, do not allow the Spanish taxman slap you a huge fine in 2019!
We offer the most competitive fees in the market. We file taxes all over Spain.
We are specialized in taxation
Larraín Nesbitt Lawyers, small on fees, big on service.
Larraín Nesbitt Lawyers is a law firm specialized in taxation, conveyancing, inheritance and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at email@example.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.
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Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.
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