Latest News

There has been many changes to the economies of the world and as a result, Spain too is experiencing serious difficulties with regard to the economy and employment.

The socialist government has initiated a number of measures to try to stabilise the economy and avoid recession, some of these measures have taken the form of new Tax Law.

It is important to clarify what exactly are these changes because many believe they are no longer liable to make any declaration of Tax and to pay taxes in Spain, which is simply not true.

Real Decreto Ley 002/2008 21.04.2008 was passed which in effect, abolishes the requirement to pay the yearly "Wealth" Tax for Nationals, which is extended to Non Residents.

This means that one of the two taxes that Non Residents were obliged to pay until 2008, has been abolished and from 2008 onwards, Non Residents are required now to pay only one tax which is Imputed or Notional Income Tax, each year.

Up until tax year 2008 Non Resident Spanish property owners were paying two taxes: Wealth and Income taxes using the Tax Model 214. From tax year 2008 onwards, the Non Resident spanish property owners will have to pay only one tax: Imputed Income Tax using the Tax Model 210. This means that there is both Non Resident Wealth and Income taxes to pay up until tax year 2008 and from 2008 onwards, there is only the Imputed or Notional Income Tax to pay.

This is of course excellent news for Non Resident Spanish property owners who have been suffering in their own countries, and can have the effect of reducing their yearly Non Resident tax bill by perhaps 50% each year, so it is welcome.

It is important to understand for Non Resident Spanish property owners, there are still taxes to pay in Spain (Non Resident Imputed or Notional Income tax and IBI tax) and failure to do so will result in penalties being added to the tax owed.

Likewise it is strongly advisable to have a Fiscal Representative in Spain who is at hand to deal with any tax issues which need to be attended to. It is impossible to attend to these matters remotely and may involve visits and communications with the Tax Administrations which can only be achieved by personal contact.