This return is filed by the non-resident seller of a property in Spain.
Making a capital gain as a result of selling a property constitutes taxable income.  Generally, the capital gain will be determined by the difference between the selling price and the price originally paid for the property.

The price originally paid for the property will be formed of the actual sum paid for the property being sold, plus the amount of the costs and taxes inherent in the purchase and which the current seller will have paid.  Depending on the year of purchase, this amount will be adjusted by applying a set of updating factors.

The sale value will be the actual sale price less the amount of the costs and taxes inherent in the sale and which are payable by the seller.

The difference as thus determined between the sale price and the original purchase price will be the capital gain.

Up until 31-12-2006 the percentage to apply to the capital gain was 35%, but with the new law the percentage as from 01 January 2007 has been considerably reduced and is now 18%.  This change was expected, because for resident persons this is also the percentage (18%), and it was considered discriminatory that non-resident persons should have such a high percentage.  This change has been made in compliance with European non-discrimination regulations, and the result is equal conditions for residents and non-residents in the matter of capital gains tax.

Once we've applied the 18% to the capital gain, from the resulting amount we'll have to deduct the 3% which the seller withheld at the time the notarised deed was signed.

Thus we'll arrive at the outcome, which may be that the Tax Office refunds to us the whole of the withholding (the 3%); that it refunds part of it to us; or that we have to pay more to the Tax Office.

To file this return one has 4 months from the date of the notarised deed, although it may be filed later.  The Tax Office has 6 months by law to make any refund.  If 6 months go by from the date of filing of the form and the Tax Office hasn't made a refund that is due, it will pay interest on late payment.