I am tax resident in the Netherlands and own an apartment in Marbella where I spend the summer holidays. During the rest of the year the property is rented. I would like to know my tax liabilities in Spain concerning this rental income.
The income received from the rental of your apartment in Marbella is subject to Spanish Non Residents’ Income Tax at a rate of 25%, without your being entitled to deduct any related expense.
This income should be declared using official Form 210 for non-resident individuals who receive income in Spain without a permanent establishment. As the apartment is in Marbella, this declaration should be filed with the tax authorities in that city. The period in which the declaration should be filed is one month after the date of accrual of the income declared, that is, one month after the rent becomes payable by the tenant or one month after the date of payment if this is sooner.
However if during a three-month period several rentals accrue, these may be declared jointly using official Form 215 during the first 20 days of the months of April, July, October and January, in respect of the income accruing during the previous quarter. This declaration should also be filed in the same locality as that indicated above.
From your query it may be understood that the apartment is let to private individuals who do not carry out any related business activity. Therefore the tenants would not be obliged to withhold any amounts in respect of Non Residents’ Income Tax from the rental payments which they make to you.
However, as payers of rental income which is subject to Spanish Non Residents’ Income Tax, the Spanish tax authorities are entitled to guarantee payment of the taxes payable by you on said rental income and therefore the tenants are deemed to be jointly liable for payment of the taxes accruing.
This means that in the event that the relevant taxes are not paid, the Spanish tax authorities could claim payment of the tax debt both from yourself and the tenants. Liability covers the entire amount of the tax debt, excluding any penalties or fines.
It is for this reason that the tenants are considered jointly liable with you and are entitled to file the above-mentioned tax declarations and pay the tax amount to which you are ultimately liable.