Non-Tax Resident, do I have obligations in Spain?

Many times when a person stops living in a country, they understand that they no longer have to pay taxes in that country and, although sometimes it is true, it is not always the case. 

In this post, we provide some tips to take into account if you stop living in Spain and become a Non-Tax resident. 

Make sure you are considered a non-resident for tax purposes In Spain 

Different to what happens in many countries, tax residence is extended to the full year. That is, you are a tax resident or non-resident for the entire tax year. There is no concept of partial residence. 

Therefore, if your departure from Spain is for example in the month of March, you must bear in mind that you would be considered a non-tax resident from the month of January of that year. 

Being a non-resident for tax purposes does not mean that you do not pay taxes 

The most relevant when you stop being a tax resident in Spain, is that you are only taxed your Spanish source income or capital gains, that is, only when generated in Spanish territory. Be careful with the employment income! The source is not the payer, or the account where you receive the salary, the source is the place (country) where you are physically performing your work. 

Do you have a home or property in Spain? For sure you have tax obligations 

The fact of being a non-resident in Spain and having a property located in Spain, will entail the obligation to pay Non-Resident Income Tax. 

In cases where the property is at your disposal (that is, it is not rented), it will be necessary to pay taxes for the corresponding imputed income. If it is rented, the tax must be paid in relation to the amount received for the rent. And if you proceed to sale it, you will have to pay the corresponding taxes on the capital gain. 

Forget about the annual deadlines and the progressive tax rates   

The deadlines for filing returns for Non-Resident Income Tax can be quarterly, annually or even monthly. It will depend on the type of return/gain that is reported.  

Likewise, the tax rate will generally be the flat rate of Non-Resident Income Tax (24% or 19% in the case of residing in a country of the European Union).  

You must know how and when to pay your taxes to avoid doing it after the deadline and therefore be exposed to surcharges and penalties.  

Do you have the right to tax refunds?

It may be that, if you have suffered tax withholdings in Spain on employment or financial income or even on capital gains, you have the right to receive a tax refund.

The procedure is different from the usual one, do not forget to have professional advice for not losing any tax refund.

Do you have a large wealth located in Spain?

Find out about the obligations of the Net Wealth Tax and whether or not the regional regulations apply to you.

FINALLY!

In the country where you are living you may be a resident for tax purposes and you will also have obligation to report what you receive in Spain. The general rule is worldwide income taxation. Get advice on how to avoid international double taxation!