Paying tax in Spain

homingbird

Hi I am thinking of moving to Spain I have a rental income from a property here in Ireland what tax would I have to pay on it if I get it lodged in a Spanish bank.

punisher5112

20% must be kept by your tenant payable to revenue. That's 20% of rent.

homingbird

punisher5112 wrote: »

20% must be kept by your tenant payable to revenue. That's 20% of rent.

Thanks those that clear me of tax in Spain also it isn't rent from a residential property so is the tax higher.

punisher5112

homingbird wrote: »

Thanks those that clear me of tax in Spain also it isn't rent from a residential property so is the tax higher.

I forgot USC is also payable I believe and tax can be up to 40%

On a commercial property I don't know that answer so sorry I can't be of help.

If you have an accountant I would suggest running it through them as they would be best to advise.
Or contact revenue, obviously different people, different circumstances etc.

homingbird

punisher5112 wrote: »

I forgot USC is also payable I believe and tax can be up to 40%

On a commercial property I don't know that answer so sorry I can't be of help.

If you have an accountant I would suggest running it through them as they would be best to advise.
Or contact revenue, obviously different people, different circumstances etc.

Ok but can't you only be taxed in one country if the money is paid into Spanish bank your taxed in Spain.

DmanDmythDledge

You'll have to pay Irish income tax and USC on the rental profits. You are also likely to be taxed in Spain on that income, certainly if remitting it to Spain, and whatever tax you paid in Ireland will be a credit against your Spanish tax liability.

There is no difference between tax rates on commercial or residential property in Ireland

Bicyclette

homingbird wrote: »

Ok but can't you only be taxed in one country if the money is paid into Spanish bank your taxed in Spain.

The income is generated in Ireland therefore it is liable to be taxed in Ireland. You will be categorised as a non-resident landlord.

Peregrinus

homingbird wrote: »

Ok but can't you only be taxed in one country if the money is paid into Spanish bank your taxed in Spain.

What bank account the income is paid into is completely irrelevant.

Under the terms of the Ireland/Spain Double Taxation Agreement, rental income from a property in Ireland is taxable in Ireland. You can't avoid this liability by having the rent paid into a foreign bank account.

As others have pointed out, in the case of a non-resident landlord Irish law requires the tenant to withhold 20% of the gross rent and pay it, not to the landlord, but to the revenue, on account of the landlord's tax liability. Your eventual liability may be more than 20% of the gross rent or it may be less; if it's less you can reclaim the difference between what was withheld and what is due. You can avoid this withholding obligation by appointing an agent in Ireland to collect your rent and deal with your tax affairs.

As you will be a resident of Spain your rental income may also be taxable in Spain (along with the rest of your income). If it is, you'll get a full credit against your Spanish tax liability on the rental income for the Irish tax you have paid.

The net result is that on your rental income you will pay whichever is the higher tax rate; Spanish or Irish.

homingbird

Peregrinus wrote: »

What bank account the income is paid into is completely irrelevant.

Under the terms of the Ireland/Spain Double Taxation Agreement, rental income from a property in Ireland is taxable in Ireland. You can't avoid this liability by having the rent paid into a foreign bank account.

As others have pointed out, in the case of a non-resident landlord Irish law requires the tenant to withhold 20% of the gross rent and pay it, not to the landlord, but to the revenue, on account of the landlord's tax liability. Your eventual liability may be more than 20% of the gross rent or it may be less; if it's less you can reclaim the difference between what was withheld and what is due. You can avoid this withholding obligation by appointing an agent in Ireland to collect your rent and deal with your tax affairs.

As you will be a resident of Spain your rental income may also be taxable in Spain (along with the rest of your income). If it is, you'll get a full credit against your Spanish tax liability on the rental income for the Irish tax you have paid.

The net result is that on your rental income you will pay whichever is the higher tax rate; Spanish or Irish.

Does this deal apply to the UK as they have left the EU.

relax carry on

homingbird wrote: »

Does this deal apply to the UK as they have left the EU.

We still have double taxation agreement with the UK. It hasn't altered.

https://www.revenue.ie/en/tax-professionals/documents/double-taxation-treaties/u/uk.pdf

DmanDmythDledge

Peregrinus wrote: »

What bank account the income is paid into is completely irrelevant.

From an Irish point of view yes, but if Spain has similar remittance rules for non-doms it would be worth looking into when the Spanish accountant/tax advisor is doing the return, if lifestyle can be funded without the rental income

homingbird

The Irish Times 2018
https://www.irishtimes.com/business/personal-finance/looking-to-retire-abroad-revenue-has-just-made-it-harder-1.3348802

The Portugal tax deal that Denis o Brien availed of.

Jerry Attrick

homingbird wrote: »

The Irish Times 2018
https://www.irishtimes.com/business/personal-finance/looking-to-retire-abroad-revenue-has-just-made-it-harder-1.3348802

The Portugal tax deal that Denis o Brien availed of.

Ah, but Spain isn't in Portugal!

homingbird

Jerry Attrick wrote: »

Ah, but Spain isn't in Portugal!

So I should be looking to Portugal as too not get ripped off twice.

Jerry Attrick

homingbird wrote: »

So I should be looking to Portugal as too not get ripped off twice.

Be sure to do your research - I recall reading some articles suggesting that it's not quite as good as it may appear. (Note that I didn't pay that much attention to them as while I'd like to move, the missus doesn't agree so it's not something that I'm in a position to do.)

homingbird

Jerry Attrick wrote: »

Be sure to do your research - I recall reading some articles suggesting that it's not quite as good as it may appear. (Note that I didn't pay that much attention to them as while I'd like to move, the missus doesn't agree so it's not something that I'm in a position to do.)

I am one up on you there as I am not married so nothing holding me back Just don't won't to get ripped off I was in Aldi early this year & heard 2 lads talking about how much one of them was milking the system for & they never worked a day in there life I don't want to be paying for that whatever about the rest of us.

Jerry Attrick

homingbird wrote: »

I am one up on you there as I am not married so nothing holding me back Just don't won't to get ripped off

Good for you! I've done the sums - twice - and getting rid of my beloved would cost me more than the tax I'd save by moving to Portugal, so I'm staying put!

homingbird

Thanks for the laugh i wouldnt go that far either if i was married .