Common Mistakes When Filing IRNR Tax Using Modelo 210

Filing the IRNR (Impuesto sobre la Renta de no Residentes) tax using the Modelo 210 form can be challenging, especially for foreigners who own property in Spain. Here are the most common mistakes to avoid:

Incorrect Tax Basis Selection

Non-residents often confuse the taxable bases, particularly when renting out their property. For rental properties, they must declare the actual rental income, while for non-rented properties, they are subject to tax on deemed income, calculated based on the cadastral value.

Incorrect Filing Deadlines

It’s common for taxpayers to mix up deadlines. The declaration must be submitted once a year, by December 31. Late submissions can result in financial penalties. Regulations and filing dates may change, so it’s essential to stay updated with Agencia Tributaria’s announcements or set up reminders with a tax advisor. Until recently, rental income declarations were filed quarterly, but starting in 2024, they will be annual. Staying informed is crucial.

Incorrect Tax Calculation

Property owners often miscalculate the tax amount by overlooking applicable deductions. For example, they may fail to deduct maintenance costs, such as repairs or administrative fees (for EU and EEA residents).

Incomplete Documentation

Proper completion of the Modelo 210 requires documents like proof of the property’s cadastral value. Missing or incorrect information can lead to the declaration being rejected or needing corrections.

Improper Payment Processing

Non-residents may face challenges when making tax payments, especially from abroad. The Spanish tax system has specific procedures for international transfers, often resulting in delays and late penalties. For instance, if selecting the option for automatic debit, non-residents sometimes provide incorrect account numbers or lack sufficient funds on the payment date.

Lack of Professional Support

Filing the IRNR tax independently without knowledge of Spanish tax law can lead to errors and even financial sanctions. Consulting a tax advisor is recommended to ensure accuracy and legal compliance.

How to Avoid These Mistakes

To avoid issues with the Modelo 210 filing, double-check all information before submission, understand tax regulations on property, and seek professional tax assistance if you are unsure about procedures.

Regular, accurate IRNR tax filings help property owners in Spain avoid penalties and complications with the Spanish tax authorities, ensuring financial peace of mind.