Taxpayers: Who Must Pay
Non-residents are taxed on a real basis , meaning they only need to declare assets and rights located in Spain or whose effects occur within the country. The following are subject to this tax:
- Non-resident individuals with assets or rights in Spain.
- Workers posted to Spain under the special tax regime of Article 93 of the Personal Income Tax Act ("Beckham Act").
Non-residents belonging to the European Union or the European Economic Area, as well as those outside the European Union, are required to file Wealth Tax in Spain if they own assets and rights located in Spanish territory whose net value exceeds the established exempt minimum of €700.000.
The only difference between the two is that non-EU residents can apply regional regulations if they find them more favorable, while those outside the EU can only apply national regulations.
Special Tax Regime for Displaced Persons
To qualify for this regime, taxpayers must:
- Not having been a tax resident in Spain in the last five years.
- Moving to Spain for a job offer or to perform administrative duties in a company.
- Apply for the regime within six months of starting work.
Application of the Autonomous Regulations
Since 2021, non-residents can apply the tax regulations of the Autonomous Community where the largest value of their assets in Spain is located. Prior to this date, this benefit was only available to residents of the EU or the European Economic Area.
Exemptions Applicable to Non-Residents
Some of the exemptions that may apply include:
- Fixed-income securities and Spanish public debt.
- Shares in foreign entities without a permanent establishment in Spain.
- Assets used for business or professional activities in Spain.
It should be noted that balances in bank accounts of non-residents are not exempt.
Double Taxation Agreements (DTAs)
Double taxation agreements can limit the taxation of non-residents. For example, if a non-resident owns shares in a Spanish company and their country of residence has signed a DTA with Spain stipulating that this asset is taxed only in the country of residence, the shares would be exempt in Spain.
Obligation to Submit a Declaration
Non-residents must file a return if:
- If the exempt limit is exceeded: The obligation to declare arises when the net value of the assets and rights located in Spain exceeds the minimum exempt from 700.000 Euros.
- Regardless of the exempt limit: There is also an obligation to declare when the gross value of all assets and rights (without deducting debts or charges) exceeds the 2.000.000 Euros, even if the net tax base is lower than the exempt limit.
The presentation model is Model D-714 , and its presentation is mandatory electronically by means of an electronic certificate, electronic ID card, Cl@ve PIN or RENØ reference number, it is presented in June of the following year.
What happens if I declare the property on Form 210?
If you have already declared the properties in Form 210 as a non-resident, you are not exempt from submitting Form D-714 if you meet the conditions established for this form.
Form 210 is used to declare and pay income tax on earnings obtained in Spain by non-residents, especially if you have income from rentals or capital gains. However, Form D-714 is related to the declaration of assets by non-residents in Spain, so if your assets exceed €2.000.000, you are also required to file Form D-714, regardless of whether you have already filed Form 210.
Fiscal Representation and Joint Liability
Non-residents may be required to appoint a tax representative in Spain if:
- They operate through a permanent establishment.
- The Tax Administration requires it due to the magnitude of its assets.
Furthermore, managers or custodians of non-resident assets may be jointly liable for the payment of the tax if they manage or hold these assets in Spain.
The wealth tax for non-residents in Spain presents various complexities, making proper tax planning essential. The choice of regional regulations, the use of double taxation agreements, and the identification of exemptions can have a significant impact on taxation.
Non-resident taxpayers are advised to analyze their financial situation and, if in doubt, seek specialized advice to optimize their taxation within the applicable legal framework.
