Non-Resident Income Tax in Spain – A Complete Guide

1. Who is a Non-Resident for Tax Purposes in Spain?

Tax residency in Spain is determined by specific criteria. You are generally tax resident if you spend 183+ days in Spain in a calendar year or have your main economic interests or family here. Everyone else is a non-resident for tax purposes. This means:

• You live abroad but have income from Spain (for example, you live in the UK but rent out a Spanish apartment).
  
  

• Or you live in Spain only part of the year (less than 6 months) and thus don’t meet the tax resident threshold.
  
  

• Or you’re an entity (company) not established in Spain but earning Spanish-source income.
  
  

Non-residents are only taxed in Spain on their Spanish-source income , unlike residents who pay on worldwide income. Spanish-source income includes things like:

• Income from real estate in Spain (rental income or imputed income from personal use).
  
  

• Capital gains from selling Spanish property or assets.
  
  

• Earnings from work or services performed in Spain (if not via a permanent establishment).
  
  

• Dividends paid by Spanish companies, interest from Spanish banks, and royalties from Spanish entities.
  
  

• Pensions from Spanish pension schemes or government (though treaties often override on pensions).
  
  

If you have none of these and only have, say, foreign income, then as a non-resident you likely have no Spanish tax obligations. But many expats and investors do have at least property, so IRNR is commonly encountered.

2. Tax Rates and Treatment: 24% vs 19%

Spain’s IRNR distinguishes between taxpayers resident in an EU/EEA country versus others:

• General rate: 24% on gross income. This applies to non-residents residing in countries outside the EU/EEA, and it applies to most types of ordinary income (rent, royalties, etc.).
  
  

• Reduced rate: 19% for residents of other EU member states, Iceland or Norway (EEA with exchange of tax info). This 19% also is the flat rate for capital gains, interest, and dividends for all non-residents.
  
  

In practice:

• Rental income: 24% tax on gross for non-EU; 19% on net for EU (effectively, EU folks can deduct expenses making it 19% of net profit).
  
  

• Interest and dividends: 19% (with often treaty reductions on dividends).
  
  

• Capital gains: flat 19% for all non-residents (Spain aligned this rate for EU or not).
  
  

• Royalties: 24% (unless reduced by treaty).
  
  

• Pensions: taxed on a scale from 8% to 40% for non-residents, but treaties typically assign taxing rights differently.
  
  

These rates are final Spanish taxes. Unlike residents, non-residents don’t combine income and apply progressive scales (except for some specific cases like pensions). Each type of income is taxed separately at its flat rate without deductions (except EU rental case as noted).

Example: You live in Canada (non-EU). You earn €5,000 rent from Spain and €200 interest from a Spanish bank. You’ll pay 24% of €5,000 = €1,200 plus 19% of €200 = €38. If instead you lived in Germany (EU), you’d pay 19% on your net rental income (say €5,000 rent – €3,000 expenses = €2,000 net, so €380 tax) and 19% of €200 interest = €38.

3. Common Types of Taxable Income for Non-Residents

Let’s break down common scenarios and how they’re taxed under IRNR:

• Rental Income from Spanish Property: As described, EU owners taxed on net at 19%, non-EU on gross at 24%. Must file typically quarterly (now annual) tax returns (Modelo 210). If property is jointly owned, each owner files for their share.
  
  

• Imputed Rental Income (property not rented): If you own a holiday home in Spain that you don’t rent out, you still must declare an imputed income once per year. This is 1.1% of cadastral value (if values updated in last 10 years) or 2% otherwise, taxed at 19% or 24% depending on residency. This tax is due by December 31 of the year following (for example, 2024 imputed income is declared by end of 2025).
  
  

• Capital Gains from Sale of Property: All non-residents pay 19% on the gain. The buyer will withhold 3% of the sale price and pay it to Spanish Tax Agency, and you file a Modelo 210 within 4 months to settle the actual 19% (see previous section on selling property).
  
  

• Investment Income (Interest and Dividends): Spain withholds 19% at source. Tax treaties often reduce Spanish tax on dividends (e.g., US-Spain treaty caps it at 15% for many shareholders, so you’d reclaim or be withheld the lower amount). Interest paid to EU residents is actually exempt from Spanish tax in many cases under EU rules, and even to others if treaty says 0%. Many non-residents end up not paying on bank interest due to exemptions.
  
  

• Royalties: Taxed at 24% standard, but treaties often reduce this.
  
  

• Employment or Professional Income in Spain: If you perform work physically in Spain and are paid (but you’re not a fiscal resident), typically 24% withholding applies. For short assignments, treaty rules might exempt it if under certain days and paid by foreign employer with no Spanish PE.
  
  

• Pensions: If you get a Spanish private pension as a non-resident, Spain taxes between 8% and 40% on a sliding scale. But government pensions (public sector) are usually only taxed by Spain if the recipient is Spanish resident; if non-resident, often taxed by the paying country (Spain) exclusively.
  
  

4. Filing and Payment Obligations (Modelo 210)

Non-residents declare their Spanish income on form Modelo 210. Key points:

• Frequency: Traditionally, rental income was declared quarterly (every quarter by the 20th of April, July, October, and January). New update: from 2024, non-residents with rental income can opt/are required to file it annually in January for the previous year. Imputed income is filed annually (one form per property per year). Capital gains within 4 months of sale.
  
  

• One form per income type: Each type of income or property often needs a separate form. For example, each rental property, each separate gain transaction, etc., has its own form.
  
  

• Payment: If a tax is due, you can pay by direct debit from a Spanish bank if filing within certain period, or by international transfer. Starting recently, non-residents can also use SEPA direct debit for payments.
  
  

• If you have no Spanish income except imputed on a vacation home, you file 210 once a year for that imputed income by Dec 31.
  
  

• Joint ownership: Each owner (non-resident) should file their portion. There’s no joint filing status.
  
  

• Tax ID: You’ll need a NIE (foreign ID number) to file and pay. Most property owners have one since it’s required for property purchase.
  
  

• Engaging help: Many foreigners use a fiscal representative or tax service to handle Modelo 210 filings. The form is somewhat technical, and any error (like using the wrong income code) can cause issues.
  
  

Non-filing can lead to penalties and interest. If you realize you missed filings (common for new owners unaware of imputed tax), it’s wise to voluntarily catch up – usually the penalties are lower if you file late on your own before the tax office contacts you.

5. Avoiding Double Taxation

Paying IRNR in Spain is one side of the coin – you may also owe tax in your home country on that same income. To avoid being taxed twice:

• Tax Treaties: Spain has treaties with many countries (including all EU states, UK, USA, Canada, etc.). These treaties often limit what Spain can tax or provide that the other country gives a tax credit. For example, the Spain-USA treaty: rental income from Spanish property is taxable in Spain (and US must give foreign tax credit). Dividends are taxed in Spain up to 15% and US gives credit for that.
  
  

• Foreign Tax Credit: When you report income back home, typically you can claim a credit for the Spanish tax paid (up to the amount of home tax on that income). So if you paid 19% in Spain on rent, and your home tax rate on that might be, say, 25%, you’d pay an extra 6% at home. If your home rate is lower than Spain’s, you might owe nothing extra (but you won’t get a refund of the difference usually).
  
  

• Residence Certificate: To claim treaty benefits (like reduced withholding), you might need a certificate of tax residence from your country. For instance, to ensure Spain withholds only 15% on dividends instead of 19%, you’d provide this to the payer.
  
  

• Special cases: Some treaty articles exempt certain incomes. E.g., many treaties say interest is only taxable in the recipient’s country, so you can submit a residence certificate and have Spanish bank pay interest gross (0% Spanish tax).
  
  

• Notable: If you are non-resident in Spain but resident of a no-tax country (with no treaty), you’ll pay Spanish tax and maybe no home tax – so actually no double tax issue. Conversely, if from a high-tax country, you’ll use the credit mechanism.
  
  

6. Special Situations and Tips

• Non-resident owning through a company: If you hold Spanish property via a foreign company, note that Spain has special rules (like “impuesto sobre bienes inmuebles de no residentes”) which can impose an annual tax on properties owned by non-resident companies located in tax havens. Also rental income by foreign companies is taxed similarly (generally 24% on net, since companies can deduct, but only EU companies get 19%). Consult a tax advisor as it can get complex.
  
  

• Beckham Law individuals: If you move to Spain and use the Beckham Law (special expat regime), you’re technically a non-resident for tax on foreign income but a resident for Spanish income. That’s beyond our scope, but just a side note that then your Spanish income (like a Spanish salary) is taxed as IRNR at 24% flat up to 600k.
  
  

• Permanent Establishment (PE): Everything discussed assumes you don’t have a permanent establishment in Spain. If, say, a foreign company has an office or you as an individual operate a business in Spain, then the taxation shifts to effectively Spanish corporate tax or personal progressive rates on that income, separate from IRNR. Most casual investors won’t have a PE.
  
  

• Deadlines and penalties: Mark your calendar for Modelo 210 deadlines. If you miss, penalties start at €100 for late filing (with no tax due or paid late) or 5-20% of tax if late paid voluntarily (depending on lateness). If the tax agency notifies you first, penalties are higher (minimum 50% of tax due). They do send notices to addresses on file, so keep your Spanish address updated or use a fiscal rep’s address.
  
  

• Use of a fiscal representative: Spain can require certain non-residents to appoint a fiscal representative in Spain (usually if you have substantial assets or if from a non-EU country, etc.). While rarely enforced on typical property owners, it’s something to be aware of. Having a local contact (lawyer or gestor) can be very helpful to handle tax correspondence.
  
  

• Exchange of information: Spain and other countries share financial info under CRS. So your home country likely knows of your Spanish bank accounts or assets, and Spain can know of foreigners’ details too. Thus, it’s wise to properly declare and not assume it goes unnoticed.
  
  

7. Recap with Example

To tie it all together, consider John, a UK resident (post-Brexit, still treated as EU for the moment in Spanish practice):

• He owns a Costa Blanca apartment. He vacations there a bit and rents it out for €800/month for 6 months of the year, and it’s empty the rest.
  
  

• Each year, he will:
  
  

  • File Modelo 210 in January covering €4,800 rental income (6 months). He can deduct expenses: say €1,800 of expenses (community fees, IBI proportion, repairs, agency). So net €3,000. Tax 19% = €570.
    
    

  • File another Modelo 210 by Dec 31 for imputed income on the 6 months it was not rented. If cadastral value is €100,000 (just an example high number), imputed base = €100,000 1.1% (6/12) = €550. Tax 19% = €104.5.
    
    

  • So total Spanish tax ~€674.5 for the year.
    
    

• John would declare the net rent and tax paid to HMRC in the UK. The UK would likely give credit for the €570 and the €104 (converted to GBP) against his UK tax on that rental income.
  
  

• If John sells the apartment later for a gain, he’ll pay 19% Spanish CGT and the buyer will withhold 3%. He’ll plan for that in advance.
  
  

Understanding IRNR helps John comply and possibly time things (like he ensures he’s EU resident to get the deduction, else he might put the property in his EU-resident wife’s name for lower tax).

Conclusion: The Non-Resident Income Tax in Spain is a crucial consideration for any foreign individual or company earning income in Spain. By knowing the rates, filing requirements, and treaty protections, you can accurately calculate what you owe and avoid penalties or double taxation. While the system may seem complex, especially with frequent filings like Modelo 210, many non-residents find that with proper guidance it becomes routine.

If you require help managing your non-resident taxes in Spain or ensuring you’re taking advantage of all deductions and treaty benefits, book an appointment with our tax advisor team. We have extensive experience assisting international clients with IRNR compliance and planning. Book your consultation here: Book an appointment.