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Spanish tax returns: what you need to know

George Mills · 3 Apr 2013, 14:00

Published: 03 Apr 2013 14:57 GMT+02:00
Updated: 03 Apr 2013 14:00 GMT+02:00

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Welcome to The Local's guide to Spanish tax returns.

Please note, we are at The Local are not financial experts. What we've learned, we've learned the hard way — by getting on the phone and listening to all those frustrating automated messages. 

The information below is designed to help, but if you are unsure of what steps to get yourself in order tax-wise, seek professional advice.

Having said all that, welcome to our list:

1) Personal income tax is known as IPRF in Spain (Impuesto sobre la Renta de las Personas Físicas). This is a progressive tax: in other words, the more you earn, the more you pay.

2) You probably don't need to hand in a tax return if you earn less than €22,000 a year and you pay tax on your salary and your bank interest throughout the year.

On the other hand, if you don´t fill in a tax return you won't be able to claim any deductions. 

Also, "the situation can be different depending on your profession," Inmaculada Pineda of B Law & Tax told The Local. So it could pay to check with a professional.

3) Anyone whole lives in Spain as a resident for tax purposes and earns over €22,000 a year, or has tax outstanding, is required to fill out a tax return.

But how do you know if you are a resident? 

The tax agency Advoco says: "The basic rule applied to determine residency is the 183 days rule: if an individual spends this amount of time or more during a calendar year then he or she is tax resident." 

For people who split their time between two countries, authorities in both countries may examine their financial affairs to decide whether they are liable to pay tax in that country. Advoco points out that you need to pay somewhere.

If you are not sure, consultant a tax advisor, accountant or financial planner.

4) If you don't live in Spain for tax purposes, but own a house here, you may need to fill in what is known as a Form 210 (Modelo 210).

5) So how does the tax return system work? Every year, Spain's Agencia Tributaria, or tax office, sends out a draft of people's tax returns to people's registered address. This is to give people advance notice on their tax obligations. If you agree with the contents of your return, you simply need to "confirm" the contents (see below).

Found out more useful advice about tax in Spain? Know something we don't? Let us know.

6) If you receive your draft tax return in the mail, you can confirm this draft via telephone on 901 200 345. However, this service is only available in Spanish national languages. If you do want to call, and you want to speak in Castellano you need to press '1' for all automated options. When The Local tried on Tuesday and Wednesday, we couldn't get through. This may improve as things quieten down.

You can also confirm your draft online here, but again this is in Spanish. You need to click on the blue button marked 'borrador'. Here you can check, change or confirm you tax return. For this you'll need your national insurance number (NIE) or tax number (NIF). You'll also need a reference number (see 7 below)

Lastly, you can also go into your local tax office and speak to someone. The tax office website says this service will be possible from May 6th onward, but you will need to make an appointment (cita previa). 

7) If you haven't received your draft tax return in the mail, you'll first need a reference number to obtain it. You can get one by visiting this page (in Spanish).

Story continues below…

Click on the yellow button marked RENØ and fill in your details. Again you'll need your national insurance number (NIE) or tax number (NIF). At the bottom of the form are options asking for your ID number from last year. But you can also choose the option for people who haven't filed a tax return before. 

Once you have completed this form, you will receive an SMS to your Spanish mobile number with a reference number.

According to the tax office, once you have the reference number, you can then go back to step 6 above. 

8) If you don't file a tax return and you owe tax, you could be fined anywhere from 50 to 150 percent above what you owe, Armando Benito of Costa Gestión told The Local.

9) The deadline for confirming your draft tax return is July 1st.

10) This year, for the first time, you can claim deductions for bingo and casino losses.

George Mills (george.mills@thelocal.com)

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