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Modelo 210 explained - Spanish taxes for Non-Residents

2019-10-23

taxadora.com – Spanish Non Resident Tax return for just 34.95 euros.

Estimated reading time: 8 minutes.

What is Modelo 210?

Modelo 210 is a tax declaration form for non-residents in Spain that is used to declare various forms of income.

Perhaps the most common form of tax in Spain that foreigners need to declare concerns the ownership of a home in Spain. You may be thinking that you have no income in Spain and wonder why you need to declare at all?

In Spain, owning a holiday home is taxed as an income benefit and thus all persons who own a property in addition to their main residence have to pay tax for this benefit.

If you are not a tax resident in Spain, this declaration is made via a form called Modelo 210.

It can be sloppy to see it as a “property tax” but it is also possible to declare other types of income via Modelo 210, for example. if you have rental income or other forms of income in Spain.

It is also necessary to distinguish Modelo 210, which is a state tax from the municipal property tax IBI – Impueste sobre bienes inmuebles. You can read more about IBI in this article where we also help you find the “IBI receipt” needed to declare Modelo 210.

Continue reading below the picture.

Ok, then you are in on what the Modelo 210 is all about, but do I need to declare?

If you spend less than 183 days a year in Spain, you are considered non-resident in Spain. Then you often have your main residence eg. in other country and normally pay your tax in that country. In this case, you need to declare your Modelo 210 if you own a home in Spain.

If you spend more time in Spain, you are considered to be a Resident. Residents in Spain will pay tax on ALL your income in Spain, including the income that arises outside Spain (with some exceptions). As a Resident, you should declare just like Spaniards once a year according to the same regulations.

You can also be considered taxable in your home country even though you live in Spain but can then claim back any double tax from your origin country.

Please click here to read more about Resident taxation in Spain. 

 

I never paid, what happens then?

I just heard about this declaration and have owned a home for several years! What am I doing now?!

Don’t worry, your home will not be confiscated by the state but in this situation you should make sure to pay the taxes you missed and start paying in the future. In extreme cases, the tax authority has the opportunity to withdraw money from your bank account or prohibit the use of the home. This can lead to e.g. water / electricity is switched off if you are really unlucky.

The Spanish tax authorities can usually go back four years in time to claim missing taxes. This means that if you failed to pay the tax for 10 years, we recommend you pay for the last four years and start paying in the future. Of course, we help with the whole process, contact us at [email protected]

If you have missed a deadline, it is good to pay the tax as soon as possible. This is because you can get a discount on any penalties 

  • if you report yourself that you missed 
  • if you pay within the amount quickly. 

This means that if the tax authorities ‘come to you’, it will be more expensive with higher late payment penalties than if you were to report a missing declaration yourself. You also receive a discount on the tax supplement if you pay within e.g. within 3, 9 or 12 months (different discount levels).

 

Why should I pay? My cousin and his neighbor in Spain say they never paid and nothing happens. If I haven’t paid in 10 years, surely nothing will happen in the future either?

Well, we would not recommend ignoring it at all. Over the years, the Tax Agency has tightened its controls and today receives a great deal of information from various sources, such as electricity companies, gas, telecommunications and internet providers. Spanish coordination of the state’s internal registers is constantly being tightened as well. 

For example, if you pay IBI, but do not declare the state tax, the tax authority can in future obtain information from the municipality that you own a property but do not declare. In addition, if you have rented out your home, there are requirements for rental companies to report their customers’ homes, which also makes it very risky to ignore the tax.

Ultimately, problems can arise when you sell your home, transfer in inheritance or in gift and capital gains / inheritance / gift tax must be declared. In these cases, any missed tax payments usually appear and are required afterwards with tax surcharges.

Finally, it is a social obligation to fulfill their tax obligations, but you already know that.

 

When should I pay?

The last date to declare the Modelo 210 is the last of December of the year following the tax year. If you have owned a home in 2019, you will have to pay for it in December 2020.

This only applies if you do NOT rent the home. If you rent out the home, you must present the taxes quarterly, 20 days after the quarter ends AND the annual tax as described above for the days you used the home yourself (not rented out).

 

Can I wait to pay?

Payment must be available to the tax authorities via direct debit or other payment method at the last date of the tax return.

To pay via direct debit, the tax authority needs at least 5 days to set this up for quarterly declarations. For annual declarations, the tax authority needs plenty of time to set up direct debit since the last day is around Christmas. We recommend declaring as early as November or early December.

If we help with your declarations and you missed the deadline for direct debit, we can still help you with payment via transfer but in these cases also need to receive the payment some day before the declaration date. If you are very late out, get in touch and we will help you avoid tax surcharges.

 

How to pay?

If you declare via us, it is part of our service that we set up the direct debit with the tax office to pay the tax. There are opportunities to pay via bank in Spain or via bank transfer, but the simplest is often a direct debit payment.

Note that if you specify direct debit as a means of payment, all persons we declare should be “titular”, ie. account holder for the bank account where the tax is deducted. If not, please contact us and we will solve it. You can also pay the tax by visiting a Spanish bank and give the declaracion to the bank teller. There is also a possibility to pay through a bank transfer.

 

What happens if I pay late?

If you miss declaring or have declared but forgot to pay, you may be subject to tax surcharges. The tax supplements are not always very expensive, but the hard work is usually the paperwork to find out how to pay this. Often a letter is sent to your Spanish address (of course in Spanish) and if you are not in the home to read the letter then it can be carried forward with additional letters and fees.

If you have missed or received a letter, please contact us and we will help you right.

But I already pay IBI

Perfect! Then you already pay the municipal property tax. It is common for the law firm that helps with home purchases to set up IBI on direct debit when they change electricity and water subscriptions. This only needs to be done in connection with the house purchase and no declaration needs to be made. You can read more about IBI in this article where we go over how it differs from Modelo 210.

If you do not pay IBI today (the municipality has never withdrawn money from your account and you have not made any payment) then there is a risk that your lawyer has missed this. Then it is important that you ensure that IBI is also paid. If you are unsure, contact us and we will assist you.

 

How much is the tax?

The state property tax is either 0.209% or 0.38% of the property’s tax value for EU membership nationals.

A property’s taxable value is called Valor Catastral and is on your IBI receipt. Please read our article on Valor Catastral and IBI to know how to find it. We need to know your Valor Catastral when we make your declaration.

The property’s valuation value is often much lower than “fair value”, ie. what you paid for the home. It is not uncommon for the appraisal value to be half or less of the real value of the home.

How much the tax is exactly depends on where the property is located. Different regions in Spain make reassessments of the valuation value at different intervals. 

The regions that have revised their property values over the past 10 years pay 0.209% in taxes, while those that have not revised their property values pay 0.38%. This is a way of equating the tax between municipalities where no revisions have been made for a very long time and thus tax values are very low compared to municipalities where tax values have been assessed in recent years.

We keep track of how much you will pay, calculate and secure the correct tax payment.

 

Can I make deduccions?

If you do not rent out your home, you can not make any deductions at all. You simply pay the percentages that apply based on your appraisal value.

If you rent out your home, you can deduct any direct costs related to the rental. There are a variety of ways to calculate these and we recommend that you contact us if you are unsure. The normal thing is to make deductions for electricity, water, communidad, maintenance (not renovations), interest rates (with Spanish housing as a loan object), costs for rental companies and possibly furniture.

We also help to figure out standard deductions that you are entitled to. Feel free to contact [email protected] if you are unsure.

 

Do we both have to pay?

If you are more owner of the property then everyone needs to declare separately, the tax is personal.

This means that everyone pays only a share of the total tax on the housing, if you eg. is a couple who owns the property in equal parts, the tax should be divided into two.

Of course, we help you both and have discounted prices for more owners regarding standard tax.

 

What do I need when I declare?

When you declare for the first time, you need to have access to “IBI receipt”, your NIE number and account number in Spanish bank. In addition to this, we obviously need your basic information such as name, address in Spain / home country and contact information.

When you fill out our form, you have the opportunity to write in all the information yourself or upload a photo on your IBI receipt. On the IBI receipt we find the information we need in general. If you cannot foot your IBI receipt, you need to fill in “Referencia Catastral” = property designation and “Valor Catastral” = tax value.

It can be a little confusing to find these so most of our customers usually send photos or scanned copies. In several municipalities, for example, several Referencias and in different formats which can be puzzling.

If you also rent out your home, we need more information in order to calculate your deductions.

Normally, the Swedish Tax Agency does not ask for a residence certificate, but it is good to have this. Read more about residency certificates below. It is especially important to have this if you rent out your home and want to make a deduction.

Read more about the IBI receipt here.

 

Certificate of tax domicile

Certificate of domicile is a document issued by the Tax Agency in your home country explaining that you have your tax residence in your home country. The Spanish Tax Agency may request this document if they are unsure of where you have your tax residence or suspect you should pay more tax in Spain. 

It is especially important to have this if you want to apply for a deduction in connection with rentals. Only members in the EU can make certain deductions and pay a lower tax rate, which means that the Spanish tax authority may require a resident certificate to prove that you are liable to tax in your home country.

What more do I need to know?

Now know the basics and know if you need to declare. Visit our website www.taxadora.com and click through to the form to get it done in just 5 minutes without leaving home. 

If there is any information you miss or feel uncertain, please send an email to [email protected], ask via chat or call +34 611 629 317 and we will help you right.

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