What Are the Consequences of Not Filing the IRNR Declaration?

Owning property in Spain is a dream for many foreign citizens. The wonderful weather, picturesque landscapes, and attractive prices for houses and apartments draw investors from across Europe. However, with the benefits of owning property in Spain also come certain legal obligations, including the filing of the IRNR declaration (Impuesto sobre la Renta de No Residentes) for non-residents' income tax.

You can read more here about who qualifies as a resident, and here about the general obligations for Polish citizens who own property in Spain.

It’s important to understand why failing to file the IRNR tax declaration can lead to serious consequences.

Financial Penalties

The most immediate consequence of not filing the IRNR declaration is financial penalties. The Spanish tax authorities (Agencia Tributaria) may impose fines ranging from 150 to 600 euros, and in cases of significant non-compliance, the fines can be even higher. The amount of the penalty depends on the severity of the infraction and the length of the delay.

Interest on Late Payments

If the tax is not paid on time, interest may be charged on the overdue amounts. These interest charges can substantially increase the total amount due, and the interest rate is determined by the Spanish tax authorities based on the current rates.

Issues with Future Transactions

Failure to file the IRNR declaration can also create obstacles in future transactions involving the property. When selling a property, the seller must provide proof of compliance with all tax obligations. An unfiled declaration may lead to delays or even prevent the transaction from going through.

Tax Audits

Non-compliance with the IRNR filing requirement can result in increased scrutiny from the Spanish tax authorities. This could lead to a detailed review of other income and tax obligations, potentially resulting in additional fines.

Loss of Eligibility for Tax Deductions

Individuals who fail to file the IRNR declaration may lose access to tax deductions that could reduce their tax obligations. In Spain, various deductions are available to property owners, and failure to file could mean higher taxes.

How to Avoid These Consequences

To avoid issues related to not filing the IRNR declaration, consider the following steps:

• Monitor Deadlines: Regularly check the filing and payment deadlines.

• Hire a Specialist: Consider hiring a tax advisor who can assist with the declaration process and ensure compliance with current regulations.

• Report All Changes: Notify the relevant authorities about any changes related to your property, including rentals or sales.

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If you want to enjoy your sunny property without worrying about tax declarations and related formalities, feel free to contact espaytax specialists.