What is the special tax on real estate of non-resident companies?

Companies resident in a country or territory considered a tax haven that own real estate in Spain are subject to Non-Resident Income Tax. Pursuant to Article 20 of Royal Decree 1776/2004, of 30 July, this special tax accrues on 31 December of each year and must be paid in the following month of January (form nº 213).

The reason for this tax responds to the proliferation of investments whose returns, whether in the hands of foreigners or centralized from companies incorporated in tax havens, are difficult to control. The aim is to penalize this type of company by demanding a direct tax on the value of their property, in view of possible fraudulent behavior.

The special tax must be presented for every property owned before the Delegation of the State Tax Administration Agency corresponding to its location. For all purposes, a property is considered to be one, provided that it has a differentiated cadastral reference.

In the case of companies with several properties located in the same Delegation of the State Agency of Tax Administration, it is possible to present a single list, specifying each of the properties separately.

In the event of co-ownership of the assets or rights together with one or more persons or entities, the special tax shall be payable in proportion to such ownership.

The special tax of non-resident companies shall not apply to:

• States, foreign public institutions and international organizations
• Entities that develop economic exploitations other than the simple tenancy or lease of real estate
• Companies listed on officially recognized secondary securities markets.

For further information regarding non-resident companies taxes in Spain,