Modelo 210 – Tax return for non-residents

1. What is the Modelo 210?

Modelo 210 is the tax return for non-tax residents in Spain for the declaration and payment of the IRNR (Impuesto sobre la Renta de No Residentes).

It applies to any natural or legal person who not resident in Spain for tax purposes but generates income in Spain.

Examples of income:

• Income from renting of a property

• Own use of a property (notional income)

• Capital gains (e.g. sale of a property)

• Interest, dividends, other income from Spain

2.Who has to hand in Modelo 210?

Obligatory are all who:

1. The following are not resident in Spain for tax purposes

   AND

2. Earn income or own property in Spainthat is subject to notional taxation.

Typical cases:

• Owner of a vacation property, even if not rented out

• Landlords of real estate

• Seller of a property

3. Types of Modelo 210 (3 main cases)

A. Non-rented real estate (own use / vivienda no alquilada)

Here a fictitious income is taxed.

Calculation basis:

• Tax base = 1.1 % (if the cadastral value has been updated in the last 10 years) or 2 % of the cadastral value (depending on how recent it is)

• tax rate:

  • 19 % for EU/EEA residents

  • 24 % for citizens outside the EU/EEA

Frequency: Annually (for the previous year, submission deadline January 1 – December 31).

B. Rented properties

Tax is paid on the income actually received.

Important:

• EU/EEA residents may deduct expenses (interest, repairs, IBI, garbage, insurance, depreciation, etc.)

• Non-EU residents (e.g. UK after Brexit) may not deduct any costs

tax rate:

• EU/EEA: 19 %

• Other: 24 %

Frequency:

• Monthly or quarterly (normal: quarterly).

C. Sale of a property (capital gain)

In the event of a sale, Modelo 210 is used to declaration of the capital gain is used.

Tax rates on profits:

• EU/EEA and third countries:

  • 19 % up to 6.000 €

  • 21 % 6.000-50.000 €

  • 23 % over € 50,000

  • (Current tables may vary slightly depending on the year)

Important:

• Buyer retains 3 % of the purchase price (Retención – Modelo 211)

• This 3 % is offset or reclaimed with the Modelo 210 will be offset or reclaimed

Deadline: 4 months after the sale.

4. Overview of deadlines

5. How is Modelo 210 submitted?

Submission is made:

1. Electronically via the website of the Agencia Tributaria (AEAT)

2. With digital certificate or via an authorized tax consultant / Gestor

Payment options:

• Direct debit

• Immediate payment

• Foreign bank transfer to the Hacienda account

6. Documents that are required

• Cadastral data (Valor Catastral)

• Rental agreements and overview of income

• Invoices for deductible costs (EU/EEA)

• Purchase/sales documents

• NIE number

• Bank details for refunds

7. Important special rules

EU/EEA versus non-EU

• EU/EEA can Deduct costs

• EU/EEA pay 19 %third countries 24 %

• UK after Brexit counts as non-EU

Multiple owners

Each owner must his own Modelo 210.

Several properties

For each property a separate declaration (depending on the type).

8. Typical errors

• No tax for non-rented properties (very common)

• Incorrect cadastral value / incorrect percentage (1.1 % vs. 2 %)

• Costs recognized, although non-EU resident

• Failure to apply for a refund after sale (3% retención)

9. Where can I find the legal basis?

Relevant legal sources:

• Ley del Impuesto sobre la Renta de No Residentes (LIRNR) – Ley 41/1998

• Real Decreto 1776/2004 (Reglamento IRNR)

• Order EHA/3316/2010 (Regulates the Modelo 210)

• Current information from the Agencia Tributaria:

  • AEAT → Impuestos → No Residentes → Modelo 210

10. For whom is Modelo 210 particularly important?

• Owners of vacation properties that are not rented out

• Landlord (short-term or long-term)

• Seller of a property

• Heirs of non-resident owners

Many foreign owners make mistakes with the annual tax – with subsequent penalties.