Non resident but own a Spanish reg car? Take care and check your tax situation…
If you are non-resident in Spain but have a Spanish registered car, you may be unwittingly registered as a Spanish tax payer – meaning you are liable for changing your foreign licence to a Spanish one, and may face a hefty fine for not doing so.
This situation can also cause you trouble if you later become a resident, as the tax office may investigate you for non-presentation of your income tax return.
Cervantes Alarcón Consulting can confirm your status in Spain, and obtain your certificate of non-residency. Contact us for details or scroll down to keep reading our free article on this subject. We can also import your vehicle into Spain.
Why this is so
A non-resident who owns a Spanish registered car will often have been registered as a tax-payer at the time of collecting the licence plates.
Many expats will not realise that this has been done automatically by their gestor (or the car dealership, if they registered a new car on your behalf).
This is in accordance with article 7) of Real Decreto 828/1995, which establishes that the person who is obliged to present the tax in question must be registered as a Spanish tax payer and be subject to the national income tax regime (regimen ordinario de impuesto sobre personas físicas).
So your gestor will have registered you as a tax-payer, in accordance with this law; otherwise the tax on the purchase of the vehicle (or the import of the vehicle) will not have been accepted by the tax authority.
It is possible that your gestor will have registered you as a non-resident tax payer, which means you will not be liable to the situation described in this article.
A non-resident who is registered on the padrón of their municipality; and who is also registered as a tax-payer are de facto residents of Spain for tax purposes (see our article Why non-residents shouldn’t be on the padrón) which may cause a surprise in the future.
What implications does this have for me?
The most important implication is the obligation for residents to exchange their driving licence for a Spanish one. Non-residents are, logically, not obliged to exchange their licence.
But if you are stopped by the Guardia Civil the onus is on you to prove that you are not obliged to exchange your licence. The fact that you are registered as a Spanish tax-payer -and will appear as such if a check is run on your identity – means any fine will be automatically applied.
The standard fine for not having exchanged your driving licence is €200.
There is also the possibility that if, in the future, you obtain Spanish residency the Tax Authority will investigate you for not having submitted an annual resident tax return if your name appears in their registry. They can issue an annual fine for up to four years.
Non residents with assets in Spain may be interested in our article on estate planning for your Spanish assets and property.
What can I do?
You first need to check your tax-payer status with the Tax Authority. If you are registered as a tax-payer then you should submit proof of being a tax-paying resident of another country and request your removal from the active list.
You will need a certificate of non-residency, which also serves as proof to the Guardia Civil that you are not obliged to exchange your driving licence.
Cervantes Alarcón Consulting can confirm your status in Spain, and obtain your certificate of non-residency. Contact us for details.
We will advise you as to what paperwork you need to obtain from your country of tax residency and if you are otherwise exposed to the obligation of filing taxes in Spain.