Tagged: 3pc retention / withholding tax
July 13, 2016 at 5:57 pm #191781FrublandParticipant
My siblings and I sold my father’s property nearly two years ago. We have paid every Spanish tax under the sun. The 3% sales retention was withheld but we made a successful claim and were told it would be repaid within 7-10 months.
16 months later and after much prodding of our Spanish notary, we received a Banco de Espana cheque for half the value BUT it had a cheque validity date only two weeks later. We got advice from our Euro bank and attempted to cash the cheque. Epic fail. The cheque will take 13 working days to be received bank by Banco Espana and by then it will have expired. Our bank instruct us to demand the tax office issue another. Our notary thinks this is unlikely.
As far as I can tell, this is yet another way to stall the repayment.
Is there a community / EU representative / anyone? we can ask to push the Tax authority into sending us the proper amount by a proper date? It is too much money to write off given that we have already paid huge sums of inheritance etc etc and are already considerably out of pocket.
Any help would be much appreciated.
July 14, 2016 at 4:07 pm #191793mariosParticipant
My god how under handed are the spanish tax authorities, time and time again they just write themselves a blank cheque when you sell your property, the way its all worked out must be illegal, I hope one day they have to repay everyone they have short changed.
July 16, 2016 at 11:36 am #191863
Just when I thought I’d heard it all the Agencia Tributaria comes up with a new way to make things difficult for people. And the organisation’s website is one of the least user-friendly sites on the planet.
I’m not aware of any ombudsman or EU representative to help you with this. I fear you might just have to throw more money at the problem with a lawyer. For what it’s worth I’m making a list of all the things that the Spanish authorities do like this to make Spain a less attractive place for foreign investors, to be taken up with the authorities later this year, if I can get a hearing.
July 16, 2016 at 4:30 pm #191871mariosParticipant
Well done Mark.
July 17, 2016 at 11:42 am #191873pisotParticipant
Pity they cant track down black money rather than screwing people trying to do things correcty
Why not try asking on the Citzens Advice Bureau Spain Facebook/webpage … they are a reg. charity and model themselves on the UK version.. they have won some cases against Spain gov. and they have a tax expert who volunteers for them… keep us updated
July 19, 2016 at 6:58 am #191887BO JANGLESParticipant
Dear Mark and everybody,
My wife and I sold our Spanish house two years ago, today we received our retention money together with interest from the Spanish tax office in Malaga. I have to say that without the help of the Spanish accountancy company Fernando Gil Martinez in Fuengirola near Malaga, who had completed our tax returns for the eight years that we lived in Spain. Getting the money back was not without potential problems. The tax office wrote to us at our old post box address that we had when we lived in Spain claiming that we had not paid our non residence tax for 2014 and 2015. We of course did not know about this until ,the accountancy company made one of their scheduled follow up visits to the tax office. On learning this information the accountancy company was able provide copies of tax returns and confirm our tax obligations to Spain had been fulfilled. I can only recommend that if you follow all the rules and use a reputable Spanish speaking organisation to keep on top of tax office ,you will get your retention tax back.it has taken just on two years though.
November 17, 2021 at 6:33 pm #242316
I am a non resident in Spain and sold my house in Mijas in February 2021. My attorney at the time submitted my returns for Capital Gains Tax and in addition to the 3% CGT liability deducted at source I paid in a substantial amount extra to finance the balance of CGT still outstanding. The attorney advised me to keep my Spanish account open for the reason that the Agencia Tributaria would be reimbursing me with a sum of money which he mentioned could be expected to be paid within the next 6 months.
I then received 3 summonses from Agencia Tributaria and what I understood was that they were suing me for underpaid Capital Gains Tax. My attorney them asked whether I wanted to contest the summons which I agreed to do and I paid a further 605Euros in attorneys fees to provide the necessary proof. I then boarded a flight to Spain and closed down my bank account for fear that the account could be frozen for between 8 to 10 years as was mentioned by my attorney.
To my surprise the Agencia responded to say that they had taken into account the motivation received and reconsidered my case favourably and they had reversed their earlier decision to sue for underpaid capital gains tax and have now committed themselves to transfer a credit to my bank account for the sum of 2950Euros.
The problem that I”m now faced with is my attorney advised that through my action of closing my bank account which the Agencia has on record, the credit was electronically tagged to my bank details and if the account no longer existed, the tax credit would be cancelled and no longer retrievable.
Effectively he sais that I can now kiss goodbye to my credit that was to be paid into my account by the Agencia Tributaria for overpaid Capital Gains Tax.
Please advise what I can now do to salvage my refund in overpaid Capital Gains Tax.
November 23, 2021 at 5:36 pm #242376
Len I don’t know the answer to your question. You would have to ask a lawyer with relevant experience.
December 20, 2021 at 8:17 am #242763
Thank you for your reply. My attorney at the time mentioned that due to the fact that my account was closed(for whatever reason) prior to receiving my tax rebate from the Agencia Tributaria I have therefore lost and forfeited the credit that I was expecting to receive in overpaid Capital Gains Tax.
He mentioned that the credit is electronically tagged to my bank details and if the account no longer exists the tax credit gets cancelled.
If this is in anyway true, surely this is a blatant traversty of justice on the part of the Agencia Tributaria and outright theft. Its an easy matter to change account details or to simply issue a cheque as a replacement for the tax rebate.
My attorney also mentions that he wants nothing more to do with the matter and he considers my case to be closed.
I still believe that sanity should prevail and am currently looking for alternatives to sorting this issue out in an amicable way.
Any further suggestions from your side would be welcome.
Kind regards, Len
December 20, 2021 at 8:51 am #242764
Hi Len, you could try one of the lawyers that advertise in the business & service directory https://www.spanishpropertyinsight.com/directory-spain/profession/lawyers-solicitors/.
Let me know if you win in the end.
December 20, 2021 at 4:46 pm #242767
Thanks Mark for your further reply. I am currently talking to one of the law firms but for the small rebate that it is its hardly worth paying out additional attorney fees to pursue the matter, but more a matter of principle then anything else.
I say it again that if this is indeed the case that the Agencia Tributaria is making illicit gains from unsuspecting non residents then it is indeed a very sad day for the Kingdom of Spain.
I will certainly keep you informed of my progress in this regards
Thanks again, Len
January 18, 2022 at 7:37 pm #243789
I just joined this forum and I gotta say thank you all for telling your stories and informing others. I wish I had joined this long ago as I have been maneuvering through the chaotic Spanish tax system on my own for 8 years and it’s been brutal.
I do have a question regarding the 3% sales retention tax, and I’m gonna ask it with numbers to make things simpler. I am a Canadian citizen and I am not a resident in Spain. This year was the first time I sold a property in Madrid and so I was learning about all of the rules as I went through the process. So let’s say I bought a property for 100,000 Euros and then now when I am selling it, I sell it for 150,000 Euros, so 50,000 Euros capital gains (I realize there are many side costs I am neglecting to mention but let’s focus on the main topic at hand the 3%). The buyers (or their agents) withhold 3% of the sale price (or 4,500 Euros) so they can later on pay that amount to the Agencia Tributaria as a portion of the capital gains tax that I am to owe.
Now since I am a Canadian and not a European citizen, I am supposed to pay 24% and not 19% in taxes from the capital gains (24% of 50,000 Euros is 12,000 Euros).
Now that I am filing my taxes with the Agencia Tributaria for this property sale, should/could I just pay them 7,500 Euros (difference between 12,000 and 4,500 Euros), or do I have to pay the 12,000 Euros first and then apply for a refund from the Agencia Tributaria for the 3% (4,500 Euros) paid initially by the buyers/buyers’ agents?
I should mention here that the buyers’ agents have already sent me a digital copy of the Modelo 211 form that shows that they have paid the 3%, so the Agencia Tributaria has already received that portion.
It may seem like a silly question, but I am simply trying to avoid any extra dealings with the agency considering we all know how unreliable they are when it comes to refunding money.
Any comments or advice are appreciated. Thanks again, and I look forward to sharing some of my horror stories with you as well…
January 20, 2022 at 1:58 pm #243802
Hector, I can understand why you want to keep your dealings with the Spanish taxman to a minimum. To the best of my knowledge, you cannot pay them what you own them NET, you have to pay GROSS and then request a refund. It means they hold your money for longer, which is obviously in their interests. I’ve never heard of anyone getting out of doing it this way. However, I’m not an expert, so you should check it with a Spanish tax specialist to be sure.
January 24, 2022 at 5:39 pm #243915
Thank you so much for the reply. I actually ended up asking a Spanish tax specialist about this topic at the end of last week and they said that it would be ok to submit the NET tax since the buyers had submitted the 3% portion to the Agencia Tributaria and we have the Modelo 211 proving that payment.
HAVING SAID THAT, I will mention that I have noticed on some occasions that even these (so-called) “tax specialists” can have differing opinions on some topics. Topics that frankly I didn’t deem to be too complicated or controversial enough to warrant a disagreement by so-called experts… so I still take their advice with a grain of salt.
Regardless and long story short, I think I will try my luck and submit the NET tax and see where this takes me. If it works then great, if it does not, then we’ll cross that bridge when we get there. From the horror stories I read above from the other members of this forum, it sounds like it might be worth the risk. Worst case scenario I imagine is a fine, which still sounds better to me than not getting back half of the 3% retention amount (or all…).
I’ll update the forum if any updates on this topic come up.
Thank you all for telling your stories, as you see they do help others in making decisions when faced with similar scenarios.
January 25, 2022 at 9:19 am #243917
Thanks for the new intel Hector. That’s very useful to know, assuming your tax specialist is correct. In the light of this your chosen course of action sounds sensible. Let us know what happens.
February 8, 2022 at 6:44 am #244165
Dear Mark and fellow forum members,
A bit of an update on this topic with some further questions about capital gains taxes. I ended up speaking with a second tax specialist on the topic of Modelo 210 tax submission for capital gains on home sales for non-residents in Spain. I asked about the 3% retained amount and whether or not I can pay the NET difference if the buyers had already paid the retained 3% to the Agencia Tributaria. This second specialist said that this is indeed possible and as he prepared the Modelo 210 draft for me to submit this, I saw that there is in fact a box on the Modelo 210 form for such pre-paid or withheld amounts. Note in the orange coloured Modelo 210 form, in the Liquidación section, Box number 29, it is for Retenciones/Ingreso a cuenta. That box is where these withheld amounts can go so you can pay the remaining balance to the Spanish tax agency.
This bit of information made me feel more comfortable about what I was submitting.
But as this second specialist looked at my tax submission, he said that I should be paying 19% on the capital gains, not 24%. Needless to say I was shocked he said that and I reminded him that I was a Canadian citizen, my tax residency is in Canada and I am a non-resident in Spain (which were all things he obviously already knew). I always knew that residents of other EU member countries paid 19%, but for my case I had to pay 24%, just as I had done for rental income. He responded to me that he had looked up the tax requirements for my case on the Agencia Tributaria website and noted that for capital gains in particular, I could pay 19% and he sent me the link for this proving his point.
Note the last table in the link and the bullet point above it:
Otras ganancias patrimoniales que se pongan de manifiesto con ocasión de transmisiones de elementos patrimoniales, el tipo de gravamen varía según el año de devengo (ver cuadro).
From this he argued that I would qualify for the 19% tax on capital gains from the sale of the property.
I’m curious, do any of you have experience with this? And what rates did you pay? I realize a lot of the members on this forum are more likely than not from EU member states, but also a lot from the UK where perhaps your situation has recently changed with regards to the tax rates, and you might be treated like non-EU foreign tax payers. Any guidance would be appreciated. I would love to pay 19% instead of 24%, but I don’t want to do it and then be hit with an angry letter from the Agencia Tributaria in a few years with a hefty fine.
Thanks in advance.
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