Non Resident Bank Accounts

In accordance with the new law that rules income tax for non-residents (article 13 of the law 41/1998) there is an obligation to prove this status of non-residency. For this purpose a communication has been issued by the tax office (Ministerio de Economía y Hacienda) dated 9 December 1999 for those people who are currently non-resident in Spain and who hold a bank account within Spanish territory. They will be obliged to provide a new document named Residencia Fiscal, the purpose of which will be to apply for the exemption of any tax retention normally made by the bank in respect of any income or profit/interest etc.. arising from the account. This applies to accounts that are held by non-residents and therefore these people will be obliged to confirm to the bank that they are resident in another country for tax purposes, assuming the compromise that they will notify the bank of any alteration in those personal circumstances. This document will be provided to the bank within one month of opening the bank account and will have a validity of two years. On the bank’s side they will be obliged to retain the document for a period of four years, which is the term during which the tax office could make an investigation or claim regarding the tax situation of an individual.
For those bank accounts opened before the date on which this order came into force (17.12.99), this document can be presented before the 30 September of the year 2000. The new regulation that we mention is, in our opinion, very important because its fulfilment is essential in order to avoid any retention for tax from any income arising from non-resident accounts; otherwise the relevant bank account will be fully operative, but the bank will be obliged to make the retention against tax, currently 18%.
This present information is just to give notice to our readers about this document that will be requested by the banks; nevertheless, we believe that because of its great importance we are sure that all the banks will provide the relevant application forms to all their clients who are in this situation. Then the only obligation for the individual will be to sign the corresponding forms when they are requested to do so.

Article courtesy of Fernando Aliaga, Abogados, Javea