How to Recover Overpaid Taxes from the Spanish Tax Office

In certain situations, taxpayers may unintentionally overpay their non-resident property taxes in Spain. This can occur for various reasons, such as errors in reporting ownership periods, applying the wrong tax rate, or misunderstanding how imputed income is calculated. Fortunately, there is a formal process to reclaim these overpayments and recover the excess tax paid.

Common Reasons for Overpaid Taxes

Overpayments usually result from simple mistakes or misunderstandings. Here are some typical scenarios:

1. Ownership Period Errors: If a property was acquired during the tax year but the taxpayer declares ownership for the entire year, they may overpay. Taxes should be prorated according to the actual ownership period within the year.
2. Incorrect Tax Rate: Non-residents from the EU or EEA are taxed at a reduced rate of 19%, compared to the standard rate of 24% for other non-residents. Applying the higher rate by mistake leads to overpayment.
3. Incorrect Income Basis: For imputed income tax, a 2% or 1.1% rate is applied to the cadastral value of the property depending on the last revision date. Misapplying these rates can result in higher tax liability.

The Process to Recover Overpaid Taxes

The Spanish tax office provides a procedure called “Solicitud de rectificación de autoliquidación y devolución de ingresos indebidos” (Request for Rectification of Self-Assessment and Refund of Undue Payments). Here is how you can initiate the process:

Step 1: Prepare a Formal Request

You must draft a formal request to the tax office explaining the error. This request should include:

• The taxpayer's details (name, NIE/NIF, address).
• Details of the tax form (Modelo 210) and the period for which the correction is being requested.
• A clear explanation of the overpayment, including calculations showing the correct amount.

Step 2: Provide Supporting Evidence

Attach the necessary documentation to support your claim, such as:

• The original tax form (Modelo 210).
• Proof of ownership dates (e.g., deeds of sale or property registry documents).
• Evidence of your tax residency in the EU or EEA, if applicable, to justify the 19% tax rate.
• A recalculation of the correct tax amount based on the property's cadastral value or ownership period.

Step 3: Include Bank Account Information

To process the refund, you must provide a bank holder's certificate showing your name and the account details where the refund should be deposited.

Step 4: Submit the Request

Submitting this type of request typically requires an electronic certificate, as it is mandatory for interacting with the Spanish tax office online. Obtaining this certificate can be a complex and time-consuming process for non-residents.

Step 5: Await Resolution

The tax office will review your application and, if approved, process the refund. This may take several months, depending on the complexity of your case and the workload at the tax office.

Simplify the Process with IberianTax

At IberianTax, we specialize in assisting non-resident property owners with all aspects of Spanish tax obligations, including recovering overpaid taxes. We understand that navigating the refund process can be daunting, especially when dealing with formal requirements and electronic certificates.

Here's how IberianTax can help you:

• No Need for an Electronic Certificate: When you work with us, you won't need to obtain an electronic certificate. We will handle the entire submission process on your behalf, ensuring compliance with all electronic filing requirements.
• Ensuring All Formal Requirements Are Met: Our experienced team will prepare all necessary documentation, making sure that every formal requirement is properly addressed. This minimizes the risk of delays or rejections due to incomplete or incorrect submissions.
• Professional Representation: We will communicate with the tax office throughout the process, monitoring the progress of your claim and keeping you informed every step of the way.
• Peace of Mind: With IberianTax managing your reclaim, you can rest assured that the process is in expert hands, saving you time and avoiding the complexities of the tax system.

Future Changes to Simplify Refunds

The Spanish tax legislator is actively working on reforms to streamline the process for reclaiming overpaid taxes. Proposed changes aim to introduce a simpler and more automated system for taxpayers to recover excess payments without requiring formal rectification requests.

These changes, once implemented, will significantly reduce the administrative burden on taxpayers and improve the efficiency of the refund process.

 
Don't let the complexities of the Spanish tax system deter you from recovering money that is rightfully yours. IberianTax will ensure that all formal requirements are met and the reclaim is made properly. You won't need any electronic certificate or have to navigate bureaucratic procedures on your own.

Reach out to us today to get started on your tax reclaim. Let us handle the complexities so you can focus on what matters most to you.