New developments in Non-Resident Income Tax

IMPORTANT REGULATORY UPDATES FOR NON-RESIDENTS, in view of the opening of the tax declaration period for the first quarter of 2024.

On January 31, 2024, Order HAC/56/2024 was published, which amends, among others, the ministerial order approving form 210 (self-assessment of non-resident income tax), with the purpose of enhancing the quality of tax information and improving the effectiveness of the assistance, investigation, and control actions of the State Tax Administration Agency.

Before the publication of said order, non-resident taxpayers in Spain who obtained income from the leasing of real estate in Spanish territory were required to submit quarterly self-assessments (Form 210). Now, non-resident taxpayers may choose to submit a single annual self-assessment that includes all income earned during the corresponding fiscal year. This annual self-assessment must be submitted between January 1 and January 20 of the following year.

Although this modification does not entail a tax advantage for the taxpayer, since the tax rates remain the same (19% for residents of the European Union and 24% for residents of non-EU countries), it represents a simplification of the administrative process by providing the option to make a single declaration instead of four quarterly ones. With the corresponding potential cost-saving in management and the financial effect of the delay in tax payments.

This measure aims to reduce administrative and bureaucratic burdens as well as improve efficiency within the State Tax Administration Agency, an entity that is currently under scrutiny.