If I let commercial premises to a company or a self-employed person, do they have to withhold income tax (the “IRPF”) from me? Who files Form 115?

Question

José Manuel Alburquerque · Accepted Answer

Yes. The company or self-employed person renting the premises from you for their business must withhold 19 % of the rent excluding VAT and pay it to the tax authorities as an advance payment of your tax. Form 115, used to pay over those withholdings, is filed by the tenant, not by you, usually every quarter. On your income tax return you include the full rent and deduct what has been withheld. There is no withholding, among other cases, if the same tenant pays you 900 euros a year or less. Who withholds and how much Companies and other entities withhold, including owners' associations. So do self-employed people and professionals when they pay the rent for their business. A private individual who rents premises for their own use, for example as a storage room or a warehouse, does not withhold. The withholding is 19 % of everything paid to the landlord, excluding VAT. With a rent of 1.000 euros a month, the invoice shows 210 euros of VAT and a withholding of 190. Each month the tenant pays you 1.020 euros and keeps the 190 to pay over to the tax authorities. You pay the VAT with your quarterly return, 630 euros per quarter less the VAT on the expenses of the premises. On your income tax return you deduct what was withheld during the year, 2.280 euros. When there is no withholding If the same tenant pays you 900 euros a year or less. This is common with parking spaces at up to 75 euros a month. If a company rents a home for its employees. If the contract includes services, as in business centres with reception, cleaning and internet. The tax authorities consider that it is not a simple letting. If you are registered under the heading for letting commercial premises of the business activities tax (the “impuesto de actividades económicas”) and, given the cadastral value (the “valor catastral”) of your properties, your charge under that tax does not come to zero. You must prove this to the tenant. The forms Form 115 is filed by the tenant from 1 to 20 April, July and October and from 1 to 30 January, each time for the previous quarter. Large companies file it every month. In January, the tenant also files Form 180, the annual summary showing what was withheld from each landlord. You file neither of them. On your income tax return you declare the whole rent and deduct the withholdings. If the tenant failed to withhold through the tenant's fault alone, you can still deduct what should have been withheld.