In previous occasions we have informed our readers, clients and friends that if they are Non Resident Tax in Spain and owners of a property (or a share of one) it is their obligation to submit a Non Resident Tax Return even if they receive no other income from letting the property, bank interest, investments, etc.

Still it is quite common for people who are Non Fiscal Residents in Spain not to pay this tax; usually due to ignorance or neglect and especially when they have no other income in Spain and only own a house, in which case the tax to be paid will be based on a percentage of the cadastral value of the property (this value appears on IBI/local rates sent by Suma or Town Hall, depending on where the property is located).

Not being a high tax, this Non Resident Income Tax was always considered a minor tax: However in the last few months and probably due to the financial crisis the Spanish Tax Office, equivalent to the Spanish Inland Revenue (Agencia Tributaria) has sent a bulk amount of letters to property owners in Spain where they indicated that they have no evidence of any tax paid as Residents or Non Residents urging them to update their status and pay the applicable tax.

We must say that this letter is more like a warning or generic reminder than a formal claim from the tax authorities, as it is informative and written in gentle terms, warning the recipient that it is possible to update their status before a inspection or penalty proceedings starts, as once this happens it could mean fines, penalties, etc.

Therefore and in order to avoid going through what some of our clients have been through, we kindly remind you that now and more than ever before, you need to comply with your tax obligations, as it looks like the Spanish Tax Office is targeting Non Resident Income Tax payers. Our office will be more than pleased to assist you taking this problem away from you, and finding the appropriate solutions for your case, updating your fiscal status in Spain.

Should any reader be in this situation or similar please do not hesitate to contact us and the appropriate advice will be provided.

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

NON RESIDENTS INCOME TAX. THE SPANISH TAX OFFICE (AGENCIA TRIBUTARIA) TARGETS NON RESIDENTS.

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