Late Tax Filing in Spain: What Could Happen?

August 7, 2023

Late Tax Filing in Spain: What Could Happen?

As a non-resident property owner in Spain, staying on top of your tax responsibilities is not only essential, but it’s also a key factor in maintaining a smooth and hassle-free financial journey. Filing your non-resident tax return (Modelo 210) might seem like just another item on your ever-increasing to-do list, but it holds significant implications that can affect your finances in Spain, so it’s important to take note!

In this article, we'll be shedding light on the importance of timely tax compliance in Spain, the potential pitfalls of late filing, and how filing your Modelo 210 tax return with IberianTax can help you in navigating the Spanish tax process with ease.

Annual Tax Filing Deadlines in Spain

Understanding the crucial annual filing deadlines is one of the first steps you should be taking to ensure that you have a stress-free tax experience. Here are some of the key deadlines you’ll need to adhere to as a non-resident property owner:
The deadline for the imputed income return is typically before December 31st of the following year. For example, the deadline to submit your return for the 2022 tax year is December 31st, 2023. 
The deadline for the Rental Income tax return must be submitted on a quarterly basis, within the first 20 days of April, July, October and January, for the prior quarter. For example, if you obtained rental income from January to March 2023, the deadline to file your 210 tax form is the first 20 days of April 2023.
Important note: Starting from the 2024 tax year, the declaration of rental income will shift to an annual basis, with the deadline for submission set between January 1st and January 20th of the following year. 
The deadline for reporting Capital Gains Tax on a property sale is within 4 months of the sale date.
Missing these deadlines can lead to avoidable financial burdens and complications that nobody wants the hassle of dealing with!

Late Filing Surcharge

Nobody likes extra charges, especially when it comes to taxes. Voluntarily filing your tax return late – that is, without any prompting from the tax authorities – can result in a surcharge. This surcharge starts at 1% of the unpaid tax due for every month of delay. Let's do some quick math: if you file in January, that's 1%; in February, it jumps to 2%, and so on, until it reaches a maximum of 12%. And if it escalates to 12% (12 months late), it will then automatically hike to 15%, along with added interest, so it’s essential to file in a timely manner.
Surcharges are notified by the tax authorities after submission and payment of each late tax return. The tax office usually sends two letters. The first one is named “Propuesta de Liquidación” where they inform you about the surcharge that they will impose and, after 1 or 2 months, they send another letter named “Liquidación” that contains a payment letter as well as the instructions to pay the applicable surcharge.

Penalties Imposed by the Spanish Tax Authorities

Penalties imposed by the Spanish tax authorities are perhaps even more unwelcome than surcharges. If you've received a letter from the authorities regarding your late filing and before you file voluntarily; the penalties start at a hefty 50% of the unpaid tax due, in addition to the interest charged from the first day of the delay. These penalties can quickly add up and leave you with a substantially increased total tax bill. 

Advantages of Timely Tax Filing

Avoiding these financial pitfalls is not just about saving money, however. The timely filing of your taxes offers other advantages too. By submitting your tax return within the deadlines, you're preventing taking on any additional financial burdens and you’re also maintaining a positive relationship with the Spanish tax office. Think of it as building good karma in the financial realm – you're reducing the risk of audits, investigations, and unnecessary headaches.  

The Importance of Compliance

Beyond the immediate financial implications, timely tax filing helps you to build and maintain a favourable tax record here in Spain. Being in good standing with the Spanish tax authorities can safeguard you from potential scrutiny or issues, and it will help you to maintain a stress-free financial journey. 

Filing your Modelo 210 Tax Return with IberianTax

Navigating the world of non-resident tax returns in Spain doesn't have to be daunting. By understanding the significance of timely filing and the potential consequences of late submission, you're taking a proactive step toward financial stability and peace of mind. At IberianTax, we're here to guide you through this process seamlessly. As a registered collaborator of the Agencia Tributaria, we offer a comprehensive online tax-filing solution that is designed to make your tax journey easy, accurate, and worry-free. 
Don't let late filing pitfalls derail your financial plans – get your taxes filed quickly and easily with IberianTax today and enjoy the benefits of timely and stress-free tax compliance. 
Start your journey with IberianTax today!
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