Understanding the Modelo 210 for Non-Resident Income Tax in Spain
The Modelo 210 is a crucial tax form for non-residents with property or economic activities in Spain. This tax, known as the Non-Resident Income Tax (NRIT), is applicable to individuals and companies that do not reside in Spain but earn income within the country. This comprehensive guide will provide an in-depth overview of the Modelo 210, its requirements, and the process for filing the tax form.
- Who Needs to File Modelo 210?
Non-residents who own property or generate income in Spain are required to file the Modelo 210. This includes:
a. Individuals or companies that own real estate property in Spain and do not rent it out.
b. Individuals or companies that rent out their property in Spain, whether on a short-term or long-term basis.
c. Non-residents who earn income through economic activities in Spain, such as freelance work or business operations.
d. Non-residents who earn capital gains or investment income from Spanish sources, including interest, dividends, or the sale of assets.
- Taxable Income and Tax Rates
The taxable income and tax rates for non-residents vary depending on the type of income:
a. Imputed Income: For non-residents who own property in Spain but do not rent it out, they are subject to taxation based on the imputed income from the property. The imputed income is calculated as a percentage (1.1% or 2%) of the property’s cadastral value, depending on the date of the last revision. The tax rate for imputed income is 19% for EU, Iceland, and Norway residents and 24% for residents of other countries.
b. Rental Income: Rental income is taxed at a flat rate of 19% for EU, Iceland, and Norway residents and 24% for residents of other countries. Expenses related to the property, such as maintenance, insurance, and mortgage interest, can be deducted for EU, Iceland, and Norway residents, but not for residents of other countries.
c. Income from Economic Activities: Non-residents earning income from economic activities in Spain are subject to a tax rate of 19% for EU, Iceland, and Norway residents and 24% for residents of other countries. Business expenses may be deductible for EU, Iceland, and Norway residents, but not for residents of other countries.
d. Capital Gains and Investment Income: Capital gains and investment income are taxed at a flat rate of 19% for EU, Iceland, and Norway residents and 24% for residents of other countries. There may be exceptions and reduced rates for certain types of income, such as dividends or interest from Spanish government bonds.
- Filing the Modelo 210
Non-residents can file the Modelo 210 online or in person at the tax office (Agencia Tributaria) in Spain. To file the tax form, you will need the following information:
a. Personal identification information, such as your NIE (Número de Identificación de Extranjero) or NIF (Número de Identificación Fiscal) and your full name or company name.
b. Property information, including the cadastral value, address, and ownership details.
c. Income details, such as the rental income or imputed income, along with any deductible expenses.
d. Bank account information for payment or refund.
- Deadlines and Payment
The deadlines for filing the Modelo 210 vary depending on the type of income:
a. Imputed Income: The deadline for filing the tax form for imputed income is December 31st of the year following the tax year. For example, for the 2022 tax year, the deadline would be December 31st, 2023
b. Rental Income: For rental income, the Modelo 210 must be filed quarterly within 20 days following the end of each quarter. The deadlines are as follows:
- First quarter (January to March): April 1st to 20th
- Second quarter (April to June): July 1st to 20th
- Third quarter (July to September): October 1st to 20th
- Fourth quarter (October to December): January 1st to 20th of the following year
Payments should be made simultaneously with the submission of the tax form for each quarter.
c. Income from Economic Activities: The deadlines for filing the Modelo 210 for income from economic activities are the same as for rental income, i.e., quarterly within 20 days following the end of each quarter.
d. Capital Gains and Investment Income: The deadlines for filing the Modelo 210 for capital gains and investment income depend on the type of income and the specific circumstances. Generally, the tax form should be filed within a month of receiving the income or realizing the capital gain.
- Penalties and Late Filing
Failure to file the Modelo 210 on time or under-reporting income can result in penalties and fines. Late filing penalties are calculated as a percentage of the unpaid tax, with a minimum penalty of €200. The percentage increases based on the delay in filing:
- Up to 3 months late: 5% of the unpaid tax
- 3 to 6 months late: 10% of the unpaid tax
- 6 to 12 months late: 15% of the unpaid tax
- Over 12 months late: 20% of the unpaid tax
Additionally, interest will be charged on the unpaid tax from the original due date.
Understanding the Modelo 210 and its requirements is essential for non-residents with property or economic activities in Spain. Ensuring compliance with the tax regulations can help avoid penalties and maintain a good financial standing in the country. If you are unsure about your tax obligations or need assistance with filing the Modelo 210, it is advisable to consult with a tax professional who is familiar with Spanish tax laws and regulations.
Colás Abogados, a reputable law firm with extensive experience in Spanish tax law, is ready to assist you with all aspects of the Modelo 210. Their team of skilled professionals specializes in navigating the complexities of Non-Resident Income Tax for clients who own property or generate income in Spain.