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NON-RESIDENT TAX On Your Assets in Spain | Pellicer & Heredia
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Oct 29, 2024
If you spend less than 183 days per year here then you are not considered a Spanish tax resident. However, you will still be liable for taxes on renting out a property or similar earnings. Just ahead of another live Webinar, Ignacio from @Pellicerheredia spoke to Kal about what you need to know, and how your payments could be minimized. Be sure to Like 👍 this and Subscribe to our channel if you found it useful. You can see more at www.alicantelawyers.es, where you can also watch back some of their previous webinars covering a whole range of topics. Website: http://www.bayradio.fm/ Mobile App: https://app.appinstitute.com/yddcc Facebook: https://www.facebook.com/BayRadioInSpain Twitter: https://twitter.com/bayradioinspain Instagram: https://www.instagram.com/bayradiospain/
View Video Transcript
0:00
pleased to say naatho is here with us in
0:01
the studio this afternoon good to see
0:03
you again my friend yeah good afternoon
0:05
Carl and we're just back really in the
0:07
office aren't we if you think about it
0:08
September people coming back off
0:10
holidays we're into October now the
0:11
countdown to Christmas sort of thing and
0:14
um so so how things been going what tell
0:16
us a little bit about the courts Moody
0:17
was very interested in this he's he's
0:19
filming again today right well well as
0:22
you as you know I don't know if
0:23
everybody will know in August uh most of
0:26
the courts close except Criminal Courts
0:29
okay so they're still ongoing there are
0:31
247 always but uh but the Civil the
0:35
administrative uh courts the labor Court
0:38
everything close uh in August right so
0:42
it's good because they give us a break
0:43
you know and we could all go and and of
0:45
course then you don't have people
0:46
disappearing at all different times of
0:48
the year everybody's away at the same
0:49
time so generally you would hope that
0:51
the administration would run smoothly
0:52
and there wouldn't be too many delays
0:54
however there are still quite a lot of
0:55
delays in the SP cours right
0:57
unfortunately we we live with it Carl we
0:59
we live with with the delay or the
1:01
overwhelm depending on the city where
1:03
you are Bas I could tell you that car
1:05
will go faster or not so some are not as
1:08
good as others yes and and there's a
1:10
thing there's a reason behind this in
1:12
some cases aren't there let's take Tor
1:13
OFA for instance because you mentioned
1:15
them when we were talking before we came
1:17
on air yeah uh actually unfortunately I
1:19
have a court case uh still
1:21
outstanding uh we had the trial one year
1:24
ago and we still waiting for the
1:27
resolution we still didn't get it we we
1:29
insist on the Court Runner and tell them
1:31
please speak to them and they they just
1:33
said I left it in the desk of the of the
1:36
of the judge and where's the judge yeah
1:38
I think they changed the judge and that
1:41
probably is an issue I mean I really
1:42
don't know the situation of that uh
1:45
specific Court what happened is very
1:48
unusual but unfortunately the client is
1:51
waiting for a sentence of course yeah uh
1:53
plus all the damage they had it was defs
1:55
on constructions case so pretty much you
1:58
buy property in Spain
2:00
uh then the Builder um obviously did
2:03
build the property let's put it this way
2:06
with the effects or
2:08
incorrectly um and then you need to sue
2:11
the developer Builder architect and
2:13
architect engineer so all this time the
2:16
clients got this problem with property
2:18
and still has so so what what causes
2:21
that sort of thing and you as you say
2:23
you mentioned tar via specifically uh
2:25
and it's something that we wouldn't
2:26
generally think of in other parts of
2:28
Europe perhaps because we don't have the
2:29
same rules as far as the padron is
2:31
concerned right well one of my guests
2:34
why this is just probably personal
2:36
opinion uh why uh some courts are more
2:40
overwhelmed than the others is because a
2:42
population uh the more people it is in
2:45
the city the more possibilities is for
2:48
you to end up going to court for some
2:50
reasons might be unfortunate because of
2:52
an accident might be a civil case
2:54
against your neighbor it could be about
2:57
inheritance or it could be whatever
3:00
right so what happens to these cours
3:02
they get overwhelmed they get with a lot
3:05
of I mean if you just go inside Chara
3:08
Court you will see how busy they are you
3:10
know and um and and the problem that you
3:14
end up having is uh the clerks or the
3:18
judges in general they try to avoid busy
3:22
courts why because they try to promote
3:25
so when they see that they don't like
3:27
and they go for a different city so you
3:29
could imagine so they avoid these places
3:32
so they come for a year or two years or
3:34
three years and they just jump on the
3:35
following one or they prefer to go to
3:37
the high court in alante because he's a
3:39
he's a better life or quieter or a
3:41
quieter uh place or whatever so this is
3:46
in fact what could happen on top of any
3:49
other there's also a lack of Personnel
3:52
in the courts in mention it again t for
3:56
instance because of the fact that uh
3:58
whilst a lot of people may live there
4:00
for part of the year they perhaps don't
4:02
live there for all of the year and of
4:05
course once people sign on the padron uh
4:07
which like I said it's not something we
4:09
have in Britain so it's not something
4:10
we're kind of used to and and and
4:11
actually some people would rather avoid
4:13
being tracked or or worry that they
4:15
might be caught by the tax man or
4:17
something but if um you're not signed on
4:19
the pad Ron that has an immediate effect
4:21
on all kinds of services not just the
4:24
courts yeah definitely I mean I remember
4:27
uh saying one of the problems T has is
4:30
lack of polican La lack of a lot of uh
4:35
public function Services Services why
4:38
they said because they call it floating
4:40
population yeah and uh so they really
4:43
don't know how many people is really
4:45
there um and I think that's one of the
4:47
problem but not only for the courts it's
4:49
for everything all public services all
4:51
public services so if you're not signed
4:52
on the padron then the local government
4:55
can't say to the national government
4:57
right this is how many people we've got
4:59
this is how much we need for our
5:00
services yes that's basically it now uh
5:03
different cities different scenarios as
5:05
you know uh but anyway I could tell you
5:08
because I've been in all the courts in
5:10
this province you know I've been to
5:12
Elder I've been to den I've been to
5:15
benid um VI hoosa you know if you go
5:19
down South El t or NOA NOA is not good
5:24
neither um noela is a busy one um why
5:28
because a wide population of people a
5:31
lot of small villages and everything if
5:34
you go there like for example pinoso uh
5:37
Hondas NE fres uh aspe all of them all
5:40
of them use the same cord I see and a
5:44
lot of you know in the Inland areas
5:46
there are always issues and um so I
5:49
really think and this is something that
5:52
I highly um thing is going to happen but
5:55
uh uh we really need uh more money for
5:58
the justice that's that's basically the
6:00
bottom line but would only come for more
6:02
people signing on the P draon I guess
6:04
well two things one is signing um one's
6:07
you you this is always good but second
6:09
is the government need to appreciate
6:11
that is an issue the fact that they got
6:13
a transum population and in general call
6:17
uh justice is never being approached by
6:20
politics in general you know is is more
6:22
they promote something different but
6:24
budget for justice is always a bit tight
6:28
I will put it this way I think the the
6:30
um the owners of the building around
6:31
here have got quite a big budget because
6:33
every time we're interviewing this week
6:34
they seem to be drilling and apologies
6:36
for the noise because it's a little bit
6:37
distracting I you're doing very well
6:39
there but I have to mention it because
6:40
it'll be coming out on camera and on the
6:43
on the audio I'm sure so for some reason
6:46
I think you know they must sleep all day
6:47
because this is the time when it starts
6:50
really quite sure what that is but when
6:52
we're about to talk to somebody he's
6:53
been quiet all day there we are
6:55
apologies for that um tell us a little
6:57
bit as well um every time we go on to
7:00
alakan lawyers. es we click on the
7:03
button up Pops a a little face at the
7:06
bottom of our screen uh asking us if we
7:10
need any help and of course this is just
7:12
one person Tamsin of a huge range of
7:16
people who are behind the scenes at uh p
7:19
and Heredia you've got a a big set of
7:22
Suite of offices and and a and a large
7:24
staff all of this you can see on your
7:26
website with the uh with the videos that
7:28
you put up but a lot of people behind
7:30
the scenes yeah we're pretty much now
7:32
riching the figure of 20 people so quite
7:35
quite interesting um but I should say
7:38
here that the secretaries that we have
7:40
in all our office are great you know
7:42
they're are fantastic H and and you
7:45
don't need to believe in it you just try
7:47
try try to speak to them they're they're
7:48
very helpful is very efficient very
7:51
efficient and uh but they all do a great
7:53
job you know because they are right in
7:55
the middle between the lawyer and the
7:57
client let's say you you ring and
8:00
they're in the middle and they know our
8:02
Diaries they know the client's
8:03
emergencies they try to commodate uh
8:06
always with a smile you know trying to
8:08
do the best so I really I really
8:11
appreciate that and it's a hard thing
8:12
because people dealing with their own
8:14
problems call uh for you for me our
8:17
problems are the number one so you could
8:18
imagine the stress they are always put
8:21
through and a weal of different cases
8:24
and different situations and scenarios
8:26
that you're having to deal with as well
8:28
for example immigration is very
8:29
stressful as well or criminal is is is
8:32
the the very stressful cases as well
8:35
especially if you're in prison isn't it
8:36
yeah uh and uh but but the tax as well
8:40
worries people and once you get a letter
8:42
he's always they oh I got a letter from
8:44
the tax man you know and we don't like
8:46
it no you know um and but but they're
8:50
very good then we have the lawyers as
8:52
well working a few of those we've met
8:54
you yourself and Pedro and Antonio ofio
8:57
and uh I'll try to bring some of them
8:59
here over over here and um and then we
9:01
have the accountants so we've got the
9:03
the the the accountants we have the uh
9:06
lawyers tax advisors and then we have uh
9:09
pedr myel the lawyers the accountants
9:12
and the secretaries but to be honest the
9:14
secretary are fantastic you know because
9:16
they try to accommodate with everything
9:19
and the Diaries are difficult you know
9:21
uh one day I mean one place one day is
9:23
in different but the good thing is there
9:25
is always probably a lawyer available if
9:28
necessary case of emergency you know and
9:31
that's very good um sometimes we will
9:33
try to be ourselves but we cannot be
9:36
everywhere you know unfortunately no you
9:38
need some backup don't you at times yeah
9:40
yeah but uh but yes and uh actually um
9:45
yeah in the website you will see the
9:46
faces of everyone MH and um and and yeah
9:50
they're doing they're doing very good
9:52
and uh actually uh and then we use the
9:55
blog as well so they help help us to
9:57
build up the blog
9:59
different things that you can find on
10:01
the blog various different um situations
10:04
um today um in the webinar you're
10:08
talking about inheritance tax that's
10:09
correct yeah um Pedro did publish in if
10:13
they go in our
10:15
website country lawyers. yes and then
10:18
you click blog and then you go taxes
10:21
Pedro did publish a very nice article I
10:24
mean is very long and very specific but
10:27
for those who are really interested to
10:29
understand and what is the rule on the
10:32
Dual taxation treaty for being tax
10:34
resident right okay uh is very specific
10:38
very wide very extend but uh but for
10:42
those who are in
10:44
some specific scenarios I think uh they
10:48
should rid it even though he it's a bit
10:50
thick and of course the fact that you
10:52
and Pedro have that experience of the UK
10:55
as well because you uh did uh study
10:58
there didn't you
10:59
you're quite qualified for situations in
11:02
the UK as well as Spain yeah and
11:05
actually now call the more you get in
11:07
now I mean we have so many Wills that we
11:09
made here in Spain and we doing a lot of
11:11
international wills and uh you could
11:14
appreciate a lot of people left money in
11:16
the bank in the UK or certain things
11:19
well for over
11:21
50,000 uh they request probate so when
11:26
you start doing the inheritance here in
11:28
Spain and then you need a hand in in the
11:30
UK and you know sometimes it's difficult
11:33
to get a hold of over there somebody and
11:35
the prizes over there as well so so we
11:38
started doing the probate ourself as
11:40
well cuz we are allowed to apply for
11:43
probate in the UK from here MH so we've
11:46
been doing probate from Spain as well
11:48
here um for those who probably were left
11:52
out over there with money in the bank or
11:55
S specific when it's about property uh
11:58
then obviously it's better better to to
11:59
to try to contact solicit or complex
12:02
scenarios but when it's we talking about
12:05
just organizing the probate because
12:07
Spain requests that and because the bank
12:10
in the UK sometimes requests that um
12:13
then yes we could help it and all the
12:15
background we had in the UK as well it
12:18
helps we were talking about the tax blog
12:21
uh that Pedro wrote tax resident Spain
12:24
uh and the UK very interesting article
12:27
and and the other thing that caught my
12:28
eye on that page which was uh the one
12:30
that was done before that essential
12:32
paperwork for international remote
12:34
posted workers we know these as uh Nomad
12:37
workers or Nomad visas um which of
12:39
course has become very much a big thing
12:41
since the pandemic yeah uh is very
12:44
popular call I mean for two two reasons
12:48
one uh a lot of people from Europe um
12:51
wants to work remotely fine okay and we
12:55
wrote down there all the requirements
12:57
for you to comply to be able to work
13:00
remotely in Spain fine and then you
13:04
could obviously if you're earning more
13:06
than
13:07
50,000 you're a Spanish who's been away
13:11
more than 5 years European or
13:13
non-european you could apply for the
13:15
Beckham law which mean paying only on
13:19
the salary that you earning and the rest
13:22
is being taxed in your home country I
13:24
see so so noras have two benefits if
13:27
you're a non-european you could apply
13:29
for for the Visa two if you are working
13:33
remotely um you could apply for Beckham
13:37
law okay um so it's quite popular that
13:41
where it gets complex is in the
13:45
situation whether you want to do be be
13:47
self-employed or you're working for
13:49
somebody else what documents you need to
13:51
get etc etc but the key of the case call
13:54
is to apply for the A1 and the S1 if you
13:58
have their certificates the certificate
13:59
especially from the UK right well the A1
14:02
even though they're International
14:03
documents but if you manage and I know
14:06
UK and Spain have this uh bilateral
14:08
agreement so you could pay social
14:11
security in the UK and you could work
14:15
here without paying Social Security here
14:17
and then you can enjoy he health because
14:20
you did contribute in the UK right so
14:23
that's Social Security then you need the
14:26
benefit you have the benefits of uh
14:28
taxes you could apply only if necessary
14:32
uh for the Beckham law and three if
14:35
you're a non-european country you could
14:37
apply for a Visa so I think it's
14:39
excellent is I think it's excellent um
14:43
and if you have a nice salary live in
14:45
Spain getting a nice salary over there
14:48
northern European wages working in Spain
14:52
it's the ideal really isn't it yeah yeah
14:55
I think is ideal um and and there's the
14:58
way to go okay this is and uh the other
15:01
article that Pedro wrote was about the
15:03
keys for you being tax resident in Spain
15:05
MH okay for those who really need to
15:08
learn a lot about it even though is is
15:11
is a lengthy one it's quite complicated
15:13
but you can find the parts that are
15:14
pertinent to you certainly yeah correct
15:17
correct and it's very well laid out
15:19
quite straightforward once once you know
15:21
where you where you are and what you're
15:23
looking for correct the bottom line and
15:24
the easy bit is more than 183 days then
15:28
you have what is the center of economic
15:30
of interest when you have oh I I I live
15:34
50% there when if you go to the treaty
15:37
article four I believe or three or four
15:40
uh it will tell you the
15:42
rules what to learn and and know how to
15:46
go when you are tax resident or non- tax
15:49
resident let's say you spend similar
15:52
days I know there are difficult similar
15:54
amount of days yeah similar amount then
15:56
you have one property here one property
15:58
there then you have all your family here
16:02
or you have it spread out and of course
16:04
people are different so it's not always
16:06
one rule applies because like you said
16:08
that split might be different for with
16:10
between different people so here the set
16:13
of rules uh for the specific is laid out
16:17
and um I think it's it's good I think we
16:19
try to bring up content call we try to
16:22
to to fill in a lot of information so
16:24
the way yeah the way to find that in
16:26
alakan lawyers. in the top uh of the uh
16:29
website there on the right hand side
16:31
you'll see blog uh and then the list of
16:34
different blogs uh taxes is at the
16:37
bottom it's an alphabetical order there
16:38
we are uh to uh to find those specific
16:41
two that we've been talking about um
16:43
nonresident tax in Spain then ignio it's
16:46
a form 210 yes that's correct and there
16:49
is a new thing that people if they're
16:52
renting out the property they still need
16:54
to do you remember in the old days they
16:56
will have to do it every quarter and you
16:59
will do if you rent it out you do the
17:00
quarter if you don't you do once per
17:03
year well now you need to do once per
17:05
year only uh which is good is more is it
17:08
makes sense you own property in Spain
17:10
but don't live here yes so let's let's
17:12
focus on uh people a non-resident less
17:17
than 183 days with property in Spain
17:19
either for themsel or just to rent it
17:22
out okay uh you do it from the 1st of
17:26
January to the 31st of December and and
17:29
uh you need to file it one year after so
17:33
this year 24 we're doing
17:35
23 right and the good thing is you have
17:38
one whole year to do it I mean in our
17:41
office we do every October just to
17:43
organize
17:44
ourselves uh so it
17:48
doesn't take over the non the resident
17:51
tax um so we try to do octob we do by
17:55
direct debit to our clients the tax and
17:58
the represent ation and we normally
18:01
represent the clients um uh because they
18:03
need to provide their address abroad and
18:06
an address in spine you do it once a
18:09
year you need to do one per person and
18:12
per property and you I will need the EB
18:16
or Suma Bill to know the value of the
18:19
property I see then you multiply uh
18:22
there is an article actually in our
18:24
website how to do it yeah uh you
18:26
multiply the pending on a one % 2% of
18:30
that um depending on the length of time
18:33
that is being the tax value updated and
18:36
then it is
18:38
24% um of that value but this form it is
18:43
per person per property so if there is
18:46
five people owning the property five
18:47
people need to file it I see it's not
18:50
it's just a depending on how many owners
18:54
they all need to do it okay and just
18:56
because you're non-resident doesn't mean
18:59
you can get away with it yeah yeah even
19:02
though to be honest the tax man is much
19:05
much stronger with residents and with
19:08
non-resident but I always recommend
19:11
clients to protects because if you're
19:13
really a non-resident try to prove it
19:16
the best way to prove it is loding
19:17
through the system that you're a
19:19
non-resident if you say
19:21
nothing then they could always have a
19:24
question W they might want more money
19:26
off you they might consider you as a
19:28
resid which which is even worse yeah
19:30
because they want to tax your worldwide
19:32
assets so the non-resident thing is a
19:34
good thing well one is because of the
19:36
law two is because the way to protect
19:37
yourself so the three main criteria for
19:40
a person to be considered non-resident
19:41
then is that they reside in the country
19:43
for a period of less than 6 months
19:45
correct person's main professional
19:47
activities are not located in Spain
19:49
correct and the main members of the
19:51
family unit spouse and children do not
19:53
reside in Spain for the whole year
19:55
correct told you this was on your
19:56
website
19:59
I've been swatting up okay well done um
20:03
and and can you save by doing this
20:04
because you said obviously it's wor it's
20:06
more you pay more taxes if you are
20:08
resident so it's better to establish
20:09
yourself as non-resident in order to pay
20:11
less well every tax call is specific an
20:15
individual okay so it's very hard to
20:17
talk general what is best for each
20:20
because everybody will have a different
20:22
information different details but uh the
20:25
bottom rule here if um one is the law
20:29
the law says if you're spending less
20:31
than 183 days you are a non- tax resent
20:33
obviously you have the Dual taxation
20:35
treaty between Spain and the and the and
20:37
the country that you're in okay Spain
20:40
has a lot of uh International treaties
20:44
with a lot of uh uh countries okay uh
20:48
but um in general terms uh obviously I
20:51
mean you only pay tax for example Suma
20:54
you pay Suma here a lot of people say
20:56
well it's it's nothing compare
20:58
especially the Americans they say well
20:59
the property tax here in Spang is
21:01
peanuts compared to what they pay um but
21:04
this is a state tax which as well
21:07
probably less than Su so probably per
21:11
person on a uh 200,000 property that the
21:15
tax value probably have uh I wouldn't
21:17
expect probably people paying more than
21:20
€150 per year okay that's doable all
21:23
right so so we're not talking about a
21:25
lot of money what about when somebody a
21:27
non-resident comes to sell their
21:29
property what happens there right you've
21:31
got a good point um then if you never
21:35
did the non-resident tax you've got an
21:36
issue because you need to Buck another
21:39
reason why it's better to yeah and then
21:41
you have the Searchers and the interest
21:44
uh and then the 3% you know when you
21:46
sell a property as a nonresident they
21:47
always retain you 3% no matter what uh
21:51
and then you need to file the capital
21:54
gain tax for a nonresident but prior to
21:57
that it's compulsory to have the four
21:59
years behind non-resident
22:01
tax other would the reason behind having
22:04
the non-resident tax forms okay and but
22:07
the most important thing because you
22:08
could say okay well I'm not going to do
22:10
it and if they find if they send me a
22:12
bill fine that's one option but the next
22:15
question I will make to you is how about
22:19
if they think you're a resident wouldn't
22:21
that be even worse we're going to pay
22:23
more aren't you because if they consider
22:25
that you're a resident and they have
22:26
grounds to Joy it you don't need that
22:28
far fight uh and they have details
22:31
because of the exchange of information
22:33
between the
22:34
countries um is it really worth it you
22:37
know and uh I live it to everyone but uh
22:40
I could only say what the law states and
22:43
then everybody will have to make their
22:44
own decisions on on on sub of course
22:46
there are other variables on
22:47
non-resident tax as well because you
22:50
know your property might just be sitting
22:51
there with nobody in it but if you're
22:52
actually renting it that's another
22:54
scenario again another scenario and and
22:56
the way is going call everything now the
23:00
artificial intelligence and exchange of
23:03
information and in the old days people
23:05
will not know you you remember these
23:07
days that everybody will not okay they
23:09
don't know much or they don't know much
23:11
tax office doesn't know but every year
23:14
they know more about a lot of things so
23:17
you transferring let's say you're
23:19
renting out your flat the money is going
23:21
to your bank account it's going here in
23:24
Spain Bank May inform the tax man that
23:28
is going in and
23:29
out um so so you have a lot of factors
23:34
that uh uh even though say so called
23:37
they're not very aggressive the
23:39
non-resident tax inspectors are not that
23:42
uh is like the wealth tax they're not
23:44
very aggressive so they're you know
23:47
don't see them pushing now the the tax
23:50
um the tax uh
23:52
resident uh well the the yeah it's a
23:55
different story I mean when you get that
23:57
letters you you you I even Panic as
24:00
well and you know how to be them I know
24:03
listen in in alak which is the head
24:05
office Nua will get every day when when
24:09
the uh pman comes he she puts a chair to
24:13
him and she goes one for one to see
24:16
telling him yes he's my client I'm
24:18
authorized no I'm not so but but tax
24:22
office will send you 50 letters or 60
24:25
letters you know and and and then you
24:27
need to go one one uh because why will
24:30
you take
24:31
one if you're not representing the
24:33
client so here's a story Taxman is
24:36
always there after us he usually wins
24:41
yeah well not always you know we fight
24:44
we fight hard against him um
24:47
because I consider that too pushy and
24:51
and sometimes unfair but in the long run
24:54
if you take it I mean the the problem
24:56
car you get the aggravation that's what
24:58
I feel sorry for the clients or even for
25:00
myself or for whoever because to deal
25:03
with it to start with you start losing
25:04
out because they take your money or they
25:07
do and they say oh just prove the
25:08
opposite so you need to defend yourself
25:11
and unfortunately it's every year I mean
25:13
they could do an inspection every year
25:15
because they they could only go up to
25:17
four years thank God okay so but anyway
25:22
we're here to help
25:30
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