Tax guide for Non-resident owners of Spanish Property

All non-residents with Spanish property are obliged to submit quarterly and/or annual returns.

This article will cover:

  1. My Spanish property is non-rented / a holiday home, what taxes should I pay?
  2. I receive rental income on my Spanish property, what taxes should I pay?
  3. How does a joint ownership tax return work?
  4. What information do I need to supply for you to prepare my tax returns ?
  5. What is the ‘valor catastral’ of my property?
  6. What expenses can I claim on my tax return?
1. My Spanish property is non-rented / a holiday home, what taxes should I pay?

You will need to file an annual income tax return to pay the deemed income tax on your non-rented property.

This is income tax on the “imaginary” rental income that you have on the property, and is calculated in reference to the rateable value (valor catastral) of the property.

The deadline is 31st December following the end of each tax year. For example, if you purchased a property in 2019, your first tax return will be due by 31st December 2020.

We can calculate your tax liability based on the rateable value and file your return on your behalf as part of our service.

2. I received rental income on my Spanish property, what taxes should I pay?

If your property is a rented out, you are required to make a tax declaration for each quarter in which you have rental income.

For the tax year 2020, the tax rate is 19% for residents of the EU, Norway and Iceland, with all rental expenses (including mortgage interest) being deductible for tax purposes.

For residents of other countries, the tax rate is 24% with the rental income received being fully taxable with no deductions.

If you are unsure whether or not you need to file a quarterly tax return, you can send an email to admin@spainaccountants.com where we will be happy to assist.

3. How does a joint ownership tax return work?

If you jointly buy a property in Spain, both you and your co-owner will have to file a tax return separately.

Only if the property in question is jointly owned by a married couple in which both spouses are non-residents, a single tax return may be filed.

4. What information do I need to supply for you to prepare my tax returns ?

We would require the personal details of each property owner and also the basic details of your property, including the date and cost of purchase and the valor catastral.

Please feel free to contact us to request the client information form for full details.

5. What is the ‘valor catastral’ of my property?

The valor catastral is equivalent to rateable value.

You will find this value on your latest rates (IBI) bill; for recently purchased properties, the lawyer/ agency who dealt with the sale may also be able to provide you with this information.

Note that this is not same as the purchase price or market value of your property. You can read more on the valor catastral here.

6. What expenses can I claim on my tax return?

As mentioned above, only residents of the EU, Norway and Iceland, can deduct rental expenses for tax purposes. Here are some examples of allowable property expenses:

  • Agency fees
  • Accountancy fees
  • Community fees
  • Utilities 
  • Repairs
  • Maintenance charges 
  • Property tax
  • Mortgage interest

For residents of other countries, there are no deductions permitted for expenses .

Need help with filing your non-resident income tax returns?

Our current charges, before 20% VAT, for each return (quarterly or annual) are as follows:

Single property owner 75 Euros
Reduced rate for joint ownership 95 Euros

This includes:

  • Drawing up your draft tax calculation and submitting to you for approval.
  • Online submission of the return and order for the payment of the tax due directly from your Spanish bank account.

Please note that the reduced rate for joint ownership is for those who are married in which both spouses are non-residents. If this is not the case, then you will be charged to file two separate single tax returns.

If you are interested in our services, please contact us and we will send you all the relevant details required to file your tax returns.

What is the Valor Catastral of my Spanish property?

This article covers:

  1. What is the valor catastral of my Spanish property? and what is used for?
  2. Where can I find the valor catastral figure?
  3. What if I don’t have the valor catastral of my property?
1. What is the valor catastral of my Spanish property? and what is it used for?

The valor catastral is the rateable value of your Spanish property. This is not linked to the market value or purchase cost of your Spanish property.

For non-resident property owners, it is used to calculate the “imaginary” rental income that you have on the property, and therefore used to calculate the deemed annual income tax due.

The taxable amount is, in general, 1.1% of the rateable value of your property.

2. Where can I find the valor catastral figure?

You can find your valor catastral on your latest rates bill or receipt (IBI), it will usually be displayed as a figure next to:

  • valor catastral
  • VC
  • V.CAT
  • V

For recently purchased properties, the lawyer/ agency who dealt with the sale may also be able to provide you with this information.

3. What if I cannot find the valor catastral of my property? / I don’t have a valor catastral yet

If you do not have your latest rates bill, you could try contacting your local Town Hall to obtain your valor catastral.

In the cases where our clients are unable to obtain the valor catastral, or their property is newly built and the value catastral has not yet been determined, we would use 50% of the purchase price, as stipulated by law, to calculate your tax due.

Need help with filing your non-resident income tax returns?

We have a basic tax guide for non-resident Spanish property owners that you may find useful.

If you would like us to file your tax returns on your behalf, our current charges, before 20% VAT, for each return (quarterly or annual) are as follows:

Single property owner 75 Euros
Reduced rate for joint ownership 95 Euros

This includes:

  • Drawing up your draft tax calculation and submitting to you for approval.
  • Online submission of the return and order for the payment of the tax due directly from your Spanish bank account.

Please note that the reduced rate for joint ownership is for those who are married in which both spouses are non-residents. Otherwise, you will be charged to file two separate single tax returns.

Please do not hesitate contact us if you have any questions or need further assistance, we will be happy to assist.

Spanish VAT for foreign companies

Foreign companies wishing to offer their services or goods here in Spain are generally required to register for Spanish VAT here: known as IVA (Impuesto sobre el Valor Añadido).

Note that there is no registration threshold in Spain and you must register prior to starting your business activity.

This article covers:

  1. How do I register for VAT in Spain as a foreign company? What documentation is required?
  2. How long does it take to get a Spanish VAT number?
  3. How often do I need to file a Spanish VAT return? What are the deadlines?
  4. How do I pay VAT in Spain? 
  5. What if I don’t have a Spanish bank account?
  6. What is the VAT rate in Spain?
  7. I need an intra-community VAT number.

The VAT registration process is relatively straightforward. On presentation of all of the required documents at a local tax office in Spain, your company’s Spanish tax/ VAT number is issued immediately.

1. How do I register for VAT in Spain as a foreign company? What documentation is required?

We offer a VAT registration service to obtain a non-resident Spanish VAT code (NIF) for you. This involves registering the company with the Spanish Tax Office.

You will need the following:

A certificate produced by the Company Registry in the country where your company was incorporated.  This must state your company’s registered address and the current directors of the company.

A Power of Attorney document –  the draft provided by us, to be signed by your company director before a Notary. This allows us to obtain your Spanish tax code on your behalf and be the tax representatives of your company in Spain.

All documents should be legalised in your country with the Hague Apostille and translated into Spanish by a sworn translator.

We will provide the Power of Attorney documents in both Spanish and English so in the event that you can find a local Spanish-speaking Notary, there will be no translation necessary for these.

We can also provide a sworn Spanish translation service at this end for a reasonable charge. We offer this service for several source languages including English and French.

2. How long does it take to get a Spanish VAT number?

On receipt of the above documentation from you, we will normally obtain your Spanish tax number within 5-7 working days.

3. How often do I need to file a Spanish VAT return? What are the deadlines?

Autonomos and Spanish businesses registered for VAT will need to submit tax returns on a quarterly basis. However, if the business’ total sales in the previous financial year was over 6 million Euros then it is compulsory to submit monthly VAT returns.

A Modelo 303 form should be submitted by the 15th of the following month after the quarter period for positive returns, and by the 20th for negative/zero returns.

For Q4 VAT returns, these shoul be submitted by January 25th of the following year for positive returns, and January 30th for negative returns.

All VAT registered businesses will also have to complete Annual VAT returns – Modelo 390.

4. How do I pay VAT in Spain?

The Spanish tax office will only accept payments from Spanish bank accounts. There are two main methods to pay the tax due:

1. By providing the IBAN of your Spanish bank account – this is the simplest way to pay your tax due as the Tax Office will charge your bank account on the due date.

It is important that you leave at least 5 days before the deadline for the payment to process, and to have enough funds in the account to meet the payment; insufficient funds will mean the tax remains unpaid and possible penalty fees.

2. Alternatively, you can pay the tax due through your Spanish bank and obtain an NRC code (Número de Referencia Completo). This code is important as it acts as reference, linking your payment to the tax return.

Most Spanish online banking systems will allow you to pay tax this way. Once you receive the code, you can then supply this to us instead of your Spanish IBAN, and we will file your return online using our digital certificate.

5. What if I don’t have a Spanish bank account?

If you are a foreign company registered for VAT and do not have a Spanish bank account, we can pay the VAT due on your behalf at an additional service charge.

We will invoice you for the tax due prior to filing your return. Therefore you must make the full payment to us before the deadline so that we can pay the tax due on your behalf.

6. What is the VAT rate in Spain?

Standard rate: 21%

Reduced rates: 10% and 4%

Read more on rates and allowances here.

7. I need an intra-community VAT number

In Spain, this is a separate registration process and you will need to submit a Modelo 036 application online.

Your VAT number will need to be validated on the VIES system – the official database for checking the validity of VAT numbers issued by EU member states.

For online traders, such as those who sell goods on Amazon, registering on the VIES may be required in order to have full functionality of your seller account.

Our services

VAT Registration

Our current charge for the VAT registration of your company is 500 Euros.

This includes the following:

  • Drawing up the draft Power of Attorney and tax representation documents;
  • Obtaining a tax code (NIF) for your company;
  • Registering your company’s business activity with the Spanish Tax Office (Form 036).

VAT Tax Returns

We can submit the Modelo 303 tax return on your behalf. Our current charge per quarter is 160 Euros, on the basis that you send us your VAT data quarterly in spreadsheet format. As part of our service we will work together with you to optimise a format to present this data.

VIES Registration

We can help you submit the Modelo 036 form to register your business on the VIES. Please contact us for more details.

Make an enquiry

If you are interested in any of our services or require further information, please send us an enquiry here and we will be happy to assist.

Amazon Sellers: Activating your Spanish VAT number as an intra-community operator

You may have received this notification to get your Spanish VAT number registered on the VIES by Amazon:

“Your Amazon seller account contains a local VAT registration number(s) that is not validated or listed in the VAT Information Exchange System of the EU commission ([VIES]).”

Although you have already registered for a Spanish VAT number, Amazon may require your VAT number to be validated on the VIES (VAT Information Exchange system) in order for your Amazon account to have full functionality.

All non-activated intra-community VAT registration numbers will fail Amazon’s validation check.

How do I validate my Spanish VAT number?

This is a separate registration process and you will need to submit a Modelo 036 application online. This form can be submitted by those who have a digital certificate issued by the Spanish Tax Office.

Unfortunately approval times may be very slow and we are experiencing six months or more for processing.


Need our assistance?

We can help you submit the Modelo 036 form to register your business on the VIES. Please contact us and we will be happy to assist.