Direct Debit of Expenses and Taxes for Foreigners in Spain (from your home country)

In Spain, managing housing expenses and taxes for foreign owners used to be complicated due to the necessity of opening a local bank account, a significant barrier because of the direct debit restrictions with foreign banks.

However, with the introduction of SEPA accounts (Single Euro Payments Area), this scenario has drastically changed, simplifying cross-border transactions in euros and allowing greater flexibility in international payments.

Modernisation in Tax Direct Debit in Spain

The Spanish Tax Agency has adapted its processes to the needs of non-residents, allowing from the 1st of February 2024, the direct debit of tax payments through accounts in non-collaborating entities within the SEPA Zone. This advancement facilitates the management of tax obligations for foreign owners, integrating them more efficiently into the European financial system.

Keys to Effective Management of Expenses and Taxes

For foreign owners in Spain, efficiently managing housing expenses and taxes is crucial. (Because as you well know, even if you are not a resident, you are obligated to pay taxes if you own a house in Spain)

Bank direct debit presents itself as a practical solution, as long as important aspects are considered:

• Account Ownership: The account for direct debit must be in the name of the property owner.
• SEPA Requirements: Essentially, the account must be SEPA, which ensures efficient transactions in the 36 member countries.
• Identification of SEPA Accounts: A SEPA account is identified by its IBAN, which facilitates transactions within the SEPA zone.
• Verifying if your account accepts direct debits is crucial, especially for international payments with the Tax Agency and other services.

Fintech and Revolut Accounts

It’s important to highlight that solutions such as fintech or Revolut may not be compatible for the direct debit of expenses and taxes due to their unconventional holder registration.

SEPA Mandate with the Tax Agency

From the 1st of February 2024, direct debits in non-collaborating SEPA accounts are facilitated, through collaborating credit entities, including the electronic signature of a SEPA mandate during self-assessment. During the telematic presentation of the self-assessment, the electronic signature of the SEPA direct debit mandate will be required. This mandate authorises the State Tax Administration Agency to send direct debit instructions to the designated entity to debit the domiciled amount.

Key Steps for the Direct Debit of Expenses and Taxes

• Verification of Ownership: Ensure that the account holder and the property owner match.
• Bank Confirmation: Contact your bank to confirm the possibility of domiciling payments to Spanish entities, verifying compatibility with SEPA.
• SEPA Mandate: For payments to the Tax Agency, the process includes the electronic signature of a SEPA mandate online, allowing the direct debit of direct debits in your account. This step is carried out during the electronic submission of the self-assessment and is a requirement to complete the direct debit.

Correct direct debit ensures efficient management of your property in Spain. Verifying with your bank and following the proper procedures are essential in this process.

If you have any questions or require further assistance with the management of your property expenses and taxes in Spain, we are here to help. At Fuster & Associates, our team of experts is dedicated to providing you with the support and guidance you need to navigate the complexities of the Spanish tax system with ease. Whether it’s understanding the SEPA mandate process for tax payments, setting up direct debits from abroad, or any other concern related to your property in Spain, do not hesitate to reach out. Our commitment is to ensure a stress-free and efficient management of your obligations, allowing you to enjoy the benefits of your property without the hassle.

We want to help you navigate all the legal complexities that come with your home buying in Spain, but this article is legal information and should not be seen as legal advice.