Tax refund - claiming property-related expenses for tax purposes
Renting out your own property in Mallorca is a way to create financial value. Landlords of residential property can deduct various expenses from the tax payable. This reduces the tax burden on rental income in Mallorca.
On average, these tax benefits, which can be achieved by submitting correct invoices, amount to at least 70 percent of the property-related investments made. This also includes, for example, the costs of hiring a tax consultant or lawyer for the quarterly tax return.
Have your invoice issued correctly
The prerequisite for tax benefits is a legally valid invoice. Apart from the Spanish VAT IVA, these invoices should also comply with other formalities. Only then will the invoices be recognized by the Spanish tax office.
Whoever commissions service providers or suppliers for real estate will be confronted with the question of whether they need an invoice (factura) at the latest after the corresponding services have been carried out. Spanish contractors are only too happy to bypass the tax authorities and are happy to do without an invoice. Be persistent and insist on the factura. Above all, make sure that the invoice contains all the details necessary for the tax office.
Who issues the invoice?
- Full company name
- First and last name of the entrepreneur
- Personal tax number (NIF) or CIF for companies
- Address
- Invoice number
Who is the invoice recipient?
- First and last name
- For company name
- Personal tax number (NIE or NIF)
- Address
When was which service provided?
- Date
- Description
Amount of VAT from the total net amount (currently 21%)
Total gross amount including VAT
A signature or company stamp of the invoice issuer can, but does not have to be provided.
If your submitted invoices do not contain the above information, they will not be accepted by the tax office. This also applies to receipts collected from supermarkets, retailers or petrol stations. These are worthless to the Spanish tax authorities. If you want to claim purchases for tax purposes, tell the cashier that you need a proper invoice.
Another tip: Invoices that you use for tax benefits must be kept for at least five years in Spain
All information about the requirements for a tax deductible invoice can be found on the website of the Spanish tax authority (agencia tributaria):
Marc Fischer
