BackIn accordance with domestic legislation, specifically Royal Legislative Decree 5/2004, of 5 March, which approves the revised text of the Law on Non-Resident Income Tax (LIRNR), income obtained in Spanish territory is understood to be income obtained directly or indirectly from real estate located in that territory or from rights related to the same.
The form of taxation varies depending on whether or not the rental of the property located in Spain is considered an economic activity. If it does not constitute an economic activity, it will be classified as income from real estate capital.
In this case, the rental is limited to the simple provision of the property, not including the provision of services associated with the hospitality sector.
However, for taxpayers resident in other EU Member States, as well as in Iceland and Norway since 1 January 2015, they may deduct the expenses established in the Personal Income Tax Act, in the case of individuals, or in the Corporate Income Tax Act, in the case of legal entities. This is valid as long as it can be shown that they are directly related to the income obtained in Spain and that they have a direct and inseparable economic connection with the activity carried out in Spain.
This income is considered accrued when it becomes payable by the lessor or on the date of collection if this is earlier.
The applicable tax rate is the general rate and from 2016, residents of the European Union, Iceland and Norway will be taxed at 19%, while all other taxpayers will be taxed at the rate of 24%.
As for the filing deadlines, they will depend on the outcome of the tax return. Therefore, the deadlines for filing Form 210, which refers to Non-Resident Income Tax, are as follows:
- With result to be paid, the first twenty calendar days of the months of April, July, October and January, referring to income whose accrual date falls within the previous calendar quarter.
- With a zero-tax liability result, the deadline will be from 1 to 20 January of the year following that in which the declared income accrued.
- With a refundable result, the deadline will be from 1 February of the year following that in which the declared income accrued, and within a period of 4 years from the period of declaration and payment of the withholding. The deadline for filing the self-assessment shall be deemed to have ended on the date on which it is filed.
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