NON-RESIDENT PROPERTY OWNERS OF BUSINESS LOCALS IN SPAIN

If you are not a resident and own a property in Spain which you rent to a Spanish company  as their business local to carry out their activity, you, as the landlord, have a series of fiscal obligations in Spain that you as well as the tenant are required to meet.

 

  • Landlord obligations 

The landlord is obliged to issue an invoice for the rent received plus 18% IVA discounting 24,75% in concept of retention, for which the landlord becomes obliged to register with the tax authorities as a businessman for IVA effects, and so acquiring the obligation to present  the corresponding quarterly (modelo 303) and annual (390) declarations.  

1. If the inididual comes from the European Union, the “modelo 210” can be presented including the income and expenses related to the rental. This would put everything in place for the landlord to receve a partial reimbursement  of the retentions paid by the landlord, the reimbusement is calculated taking in to account the expnses entailed in the rental. The rebate can be applied for by duly filing the “modelo 210” with the tax office from the 1st of February of the following year. 

1.If the landlord does not come from the European Union, the landlord shall not need to present any taxes at the Spanish tax authorities, the retentions paid to the tax office during the rental period are sufficient. 

 

  • Tenant obligations 

The tenant is obliged to make a quarterly payment to the tax office via the “modelo 216” this quarterly payment is 24,75% of the rental fee.   

The tenant as a passive subject to IVA shall present declarations on a quarterly and annual basis. 

 

Let’s see an example 

An Englishman, Mr. Taylor, that lives in London and owns a property in Spain, has rented this property to a Spanish company that carries out catering activities.  

Mr. Taylor receives a 1500 euro rental fee from the Spanish company and issues an invoice with 289,70 euro IVA and a 398,34 euro retention.  

Mr. Taylor has the following annual expenses in relation to the rental: the IBI (local rates) 850 euros and a repair to the buildings facade that come to 7.600 euros. Because there are expenses we are able to calculate a rebate by dully filing the form “modelo 210”:  

Income: 1.500×12= 18.000 euros

Expenses: 8.450 euros

Tasable base; 9.550

Tax rate: 24,75%

Integral quota: 2.363,63

Retentions paid by the tenant: 4.780,08

Result of the rebate calculation: -2.416,45 

 

Mr. Taylor is entitled to claim back a total of 2.416,45 euros.

 

For further information on this regards, we welcome you to visit our web site http://www.vivespons.com. As always, we remain at your entire disposition.