In order to be aware of our tax obligations we take this opportunity to make a brief review to the model 210 relating to the income received by non-residents without permanent establishment. We are going to analyze the basic aspects to consider.
The way in which an individual or entity must pay tax on its income in Spain is determined according to their residence. So, residents in Spanish territory will be taxed by the Income Tax of Individuals (income tax) or corporation tax (IS); while non-residents, both individuals and entities, will be taxed by the Income Tax Non-Resident (IRNR).
Definition of residence in natural persons (Article 9 LIRPF).
Definition of residency in legal persons (Article 8.1 LIS).
At the same time, in the IRNR it can differentiate two ways of earn rentals:
- Those obtained by permanent establishment in Spanish territory; finding us in this case to a regular tax and, as with corporate income tax, the tax period coincides with the financial year of the permanent establishment, but may not exceed twelve months, interest will accrue on the last day of that period.
- And obtained without Permanent Establishment where the tax is payable when due. Form 210 refers to the latter.
2.Who is obligated to declare by the Model 210:
Model 210 is used to declare those profits earned in Spain without a permanent establishment by taxpayers subject to non-resident income tax.
They shall not be required to file a self-assessed tax return regarding the income which the withholding was applied to or the on-account payment made, with the exception of capital gains derived from the reimbursement of shares in investment funds regulated in Law 35/2003, dated 4 November, on collective trust institutions when the applied withholding has resulted less than the calculated tax liability with the provisions in Articles 24 and 25 of the Tax Law.
They shall also not be obligated to file a self-assessed tax return regarding income subject to withholding or on-account payment but exempt on account of Article 14 of the Tax Law or in an applicable agreement.
However, it must still be declared in the following cases:
- Income subject to Non-Resident Income Tax but exempt from tax withholding and payment on account, in accordance with article 10.3 of the Tax Regulations. These include, for example, capital gains derived from the sale of shares.
- Natural persons. Income from urban buildings.
- Payments made by natural persons who are not withholders. For example, earnings obtained from property lets when the tenant is a natural person and pays the rent for purposes other than an economic activity.
- Income obtained by the transfer of immovable property situated in Spanish territory.
- To request a refund of excess withholding or payment on a account related to the tax levied.
3.Types of income to declare
- Income from capital (dividends, interest, royalties). 2016 will be taxed at 19%.
- Earnings from real estate (rent on real estate). 2016 will be taxed at 19% for those living in the EU, Iceland and Norway and to 24% for all other taxpayers.
- Imputed income from urban real estate (only individuals). 2016 will be taxed at 19% for those living in the EU, Iceland and Norway and to 24% for all other taxpayers.
- Work income. 2016 will be taxed at 19% for those living in the EU, Iceland and Norway and to 24% for all other taxpayers.
- Patrimonial profits that are manifested during transfer of assets. 2016 will be taxed at 19%.
- Other patrimonial profits different from previous ones. 2016 will be taxed at 19% for those living in the EU, Iceland and Norway and 24% for other taxpayers
As of January 1, 2011, the only model 210 all types of income, both to declare income as patrimonial profits and real estate income imputed.
At the same time, this model is used to declare income separately or, except in the cases of imputed rents and property income from real estate transfers, to declare in grouped form various incomes, provided they correspond to the same type of income, come from the same payer applies the same tax rate and, if they come from an asset or right, proceed in the same asset or right.
The period will be quarterly in the case of declaration with results to deposit in, or annually, if the result is a return or a zero quota.
5.Deadline for submission
Varies according to the type of income obtained:
- Income derived from the transfer of real estate: within three months after the period of one month after the date of transmission (accrual date) of the property.
- Imputed income from urban real estate: in the year following the date of accrual (December 31 of each year).
- Other income:
- Declarations with results to deposit in: first 20 days of April, July, October and January in relation to income whose accrual date falls within the preceding calendar quarter.
- Declarations of zero quota: 1 to 20 January following the accrual of income declared year.
- Declarations with return request: from 1 February following the accrual of income declared and within 4 years from the end of the reporting period and income withholding year.