Thursday, 29 November 2012

IMPORTANT : Spanish Non-Residents Tax Alert

I have received information from two trusted sources that the Spanish tax authorities promised clampdown will start to affect property owners IMMEDIATELY

For background there are two of my previous posts which are worthy of consideration

  • Tax Avoidance and Tax Evasion

  • Five Taxes which affect Spanish Non-Residents

Putting together the information I have the timeline appears to be as follows;

  • In late 2011 and early 2012 the tax office identified approx 250,000 houses from which no taxes were being received. Using local records, including the Town Halls and Land Registry, the owners have been identified

  • Recently bills have been prepared and will be sent out en masse for maximum effect before the end of 2012. These bills are for tax due in 2011, in accordance with the normal payment arrangements. However, they also have authority to collect a further 4 years if this was not paid.

Non-Payers can therefore expect bills dated back to 2007 with non-payment penalties added.

  • For those who continue to wilfully non-pay, action will be taken to take the funds from bank accounts or where there are insufficient funds, to FREEZE BANK ACCOUNTS

They know your bank accounts because the banks complete an annual return on all accounts held by Non-Residents. In fact the Bank probably charges you for the privilege!

What can you do about it?

Pay your non-resident taxes is the obvious one

Also check with your Fiscal Representative that your tax has been paid. If you don’t have a representative, I can put you in touch with one for your area if you email me and let me know where your property is.

A final warning

One reader told me that he was quite relaxed and didn’t intend to pay the tax until something happened to change his mind. He received a bill from the Spanish tax office to his UK address.

If you can add to this topic, I’d be delighted to hear from you

David Goodall
Financial Pages in Spain