Taxation for non-residents
The non-resident income tax in its annual form (when there is no renting) keeps being the main point of confusion for many non-resident proprietors who still think that, by only paying for the Property Tax at the Town Hall where they live, they are fulfilling their tax obligations.
TAXATION FOR NON-RESIDENTS: NON-RESIDENT INCOME TAX WHEN THE PROPERTY IS NOT BEING RENTED.
Do I have to declare the Income Tax for non-residents if I do not rent my property?
The reply is yes. The law on Non-resident Income Tax includes the case of property as an assumption of income imputation even if you do not rent your property or if you do not do it during the whole year.
What should I have to take into account?
This way of paying the tax is declared during the year after its accrual. That is, during 2019 it is declared for the year 2018 and the term to do so is during all the year 2019.
Please, take into account that this tax (different from, let’s say, the Property Tax) is not settled automatically but you (or your lawyer or tax consultant) have to do the declaration on your behalf.
According to the value or the Price of your property, please ask whether you have to declare also the Wealth Tax (at the moment of writing this article the minimum amount exempt from declaring was 700.000 € , but you have to bear in mind the necessity to be informed in your particular case).
Is there any property exempt from paying?
Land or urban plots are not considered payable goods, nor in case of multi-property rights (also known as turn-taking of real estate) if the lapse of the same do not exceed two weeks per year.
What is the rate of this tax?
At the moment of writing this article, the rate was 19% for residents from the European Union, Norway and Iceland and 24% for the rest of the residents from other countries.
Take into account that the tax rates can change from one year to the other.
Which tax model to declare do I have to present?
What other forms of Non-resident income tax are there?
in an enumerative and non-exclusive way, we could stress the most well-known declarations:
– For renting property yields (to be paid quarterly)
– For transfer (if you sell your property and you are a non-resident, you will be retained a 3% of the price for this concept and it will be entered to the Tax Agency within a term of one month after the signature of the selling). This form would be a kind of advanced payment to the Tax Agency for the capital gain generated by the sale.
– Declarations for capital gains or losses (which would be done within a maximum term of 3 months from the date of the first month after the selling, as it is the first month after the selling the term you have to pay for the 3% retained from the price of the selling as non-resident income tax).
Remember that this information is merely indicative and that it should have to be updated at the moment you do the declaration and also remember the necessity to find a counsellor for your particular case.
Do not hesitate to contact us for any question or advice you may need to this respect.