The Spanish Inland Revenue around this time of years sends thousands of tax claims for personal income tax to foreign property owners. If you are a property owner, even if you are a tax resident in a different country, you are likely to be notified that ‘the inland revenue has information that might indicate that you are liable for personal income tax in Spain’. Consequently, you are invited to proof the Inland Revenue wrong, or else they will proceed to impose personal income tax on you, together with fines and penalty interests.
The following is our experience in these cases. We hope it is not yours.
Problem is that most notifications will not reach the property owners. In many areas, post simply does not arrive. Addresses are not up to date, or you are simply not around all day to pick up a letter. This is how you might stay unaware of the situation, but this is of no concern of the Spanish Inland Revenue. After 2 attempts, they will publish the notification in the official journal and consider you served officially. Since you have not responded, you are now liable for personal income tax and they have the right to confiscate your bank account, your property or any other asset and you seem doomed to pay something that is not right.
Even if you do receive the letter, you will probably not understand the content. Property owners in those cases will typically bring the notification to their ‘gestor’, who in many cases forgets to respond within the deadline and once your gestor has missed the deadline, he or she will probably inform you that you are liable to pay something that is not right.
Even if your ‘gestor’ responds within the deadline, they will respond in a lot of cases in a wrong way. They will tell you to provide a copy of your tax return in your home country. The Spanish Inland Revenue will not accept the paperwork and will still hold you liable to pay something that is not right. They will tell you to deliver a sworn translation and apostille, but after evaluation they will still continue to hold you liable to pay something that is not right because you haven’t delivered the right paperwork.
There are ways to stop this tax aggression from the Spanish Inland Revenue. It is not you that have to proof your innocence, but the Spanish Inland Revenue who needs to proof that you are liable for personal income tax in Spain. The letters they sent are mere fishing expeditions, to see what they can collect.
So when you receive such a letter, (instruct your gestor to) ask the Inland Revenue what proof or information they have to make them think you might be liable for Income Tax, and have them send a full file. You are bound never to hear from them, or they simply continue to collect.
In the latter, and although you have no obligation, it is easier and cheaper to provide them with a certificate from your home country that you are a tax resident there. The alternative is litigation which is more expensive. In many cases this will stop the Spanish Inland Revenue to continue mobbing you. If they demand a translation you have to know that since Spanish personal income tax laws do not apply to non tax residents, you have no obligation to provide translations or apostilles. Still it would be easier to do so if this avoids further correspondence from the Spanish Inland Revenue.
If you find yourself in a situation where the Spanish Inland Revenue keeps harassing you, or when the deadline has past and they want to collect, you need to find a lawyer to defend your case in an administrative court. There is always a way of making right what is wrong.