Taxes and Legal Obligations for Non-Residents in Ibiza

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Navigating the complexities of the Spanish tax system can be overwhelming, especially when it comes to Taxes and Legal Obligations for Non-Residents in Ibiza.

Having specialized legal advice is crucial to ensuring compliance with tax obligations and avoiding costly penalties. 

At Almar Lawyers, we provide expert tax advisory services for non-residents, ensuring full compliance with Spanish tax regulations while optimizing your tax burden.

Who is Considered a Non-Resident in Spain?

Under Spanish law, an individual is considered a non-resident if:

• They do not live in Spain for more than 183 days per year.
• Their main economic interests are not based in Spain.

This classification is key, as it determines your tax status and the fiscal obligations you must fulfill. Our legal team can help determine your residency status and prevent any legal issues.

What taxes must non-residents pay in Ibiza?

Non-Resident Income Tax (IRNR):

• This tax levies income earned in Spain by non-resident individuals. The most common types of income are income from property rentals and capital gains from property sales.
• Applicable tax rates:
  • 19% for residents of EU countries, Norway, or Iceland.
  • 24% for residents of other countries.
• A tax lawyer can help you calculate and correctly declare this tax, and take advantage of potential tax benefits.

Real Estate Tax (IBI):

• This is a municipal tax that levies property ownership. All property owners in Ibiza, both residents and non-residents, are required to pay it.
• A lawyer can help you understand the IBI calculation and ensure you are paying the correct amount.

Wealth Tax:

• This tax levies net wealth as of December 31 and applies to both residents and non-residents with assets in Spain.
• Non-residents only pay tax on the value of their assets and rights located in Spain, such as real estate, bank accounts, or shares.
• A lawyer specializing in wealth tax can help you optimize your tax situation and take advantage of potential exemptions.

Municipal Capital Gains Tax (Plusvalía Municipal):

• This tax levies the increase in the value of the land from the time it was acquired until it is sold.
• A lawyer can help you calculate this tax and ensure you are paying the correct amount.

Taxes on property purchases in Ibiza:

• When buying a property in Ibiza, non-residents must be aware of two main taxes:
  • Property Transfer Tax (ITP): applies to second-hand properties, with a general rate of 8-11% depending on the property’s value.
  • Value Added Tax (VAT): payable on the purchase of a new property and amounts to 10% of the price. There is also a Stamp Duty (IAJD) that varies between 1% and 1.5%.
• A lawyer can help you understand these taxes and ensure you are meeting all legal obligations.

Inheritance and gift tax:

• This tax levies inheritances and gifts with assets located in Spain.
• The conditions for non-residents are generally less advantageous than for residents, although there are specific agreements within the EU.
• A lawyer specializing in inheritance and gift tax can help you manage these procedures and minimize the tax burden.

Consequences of Non-Compliance with Tax Obligations

Failure to comply with tax obligations can result in significant financial penalties, such as fines and surcharges. 

It can also make it difficult to carry out future property transactions in Spain.

A lawyer can help you avoid these consequences and ensure that you comply with all your legal obligations.

Contact our lawyers ,we will guide you through the legal and tax procedures and help you optimise your situation in Ibiza. Discover all our services and contact our experts now.  Follow us on Linkedin to make sure you don’t miss a thing.

Remember: The information contained in this article is general in nature and is not a substitute for professional advice.