The purpose of this post is to encourage the presentation of complaints before the European Commission against the brutal and unjustified tax discrimination suffered by residents (Spanish or foreign) in non-EU countries with real estate properties leased in Spain.

Said parties are obliged to pay Non-Resident Income Tax (IRNR) in Spain on the full amount of the rents, without being able to discount any expenses (article 24.1 IRNR Act) and applying a 24% rate (article 25.1.a) IRNR Act), while the residents who live in the EU or in the European Economic Area (EU plus Norway and Iceland) pay tax on the net income (according to article 24.6 IRNR Act, can discount all types of expenses from the collected rents related to the property: amortization, Property Tax (IBI), repairs, Property-Owner Association/Community expenses, interests, etc.), and a tax charge rate of 19% (article 25.1.a) LIRNR) is applied to them.

The tax differences between the Non-resident EU and non-EU landlords are BRUTAL (it is possible to see examples in my post on 26/12/2017), and there are also very significant differences between the  non-resident landlords of houses and resident taxpayer landlords who may discount expenses in the Spanish income tax (IRPF) and also apply a 60% reduction of the net income (in the leases of houses for permanent use) before applying the progressive income tax (IRPF) rate.

There are a high number of people affected by this discrimination against non-resident non-EU landlords, which above all, include the residents in the United Kingdom following the consummation of Brexit since 1/1/2021. Undoubtedly, the majority are foreigners who invested in real estate properties in Spain, however numerous Spaniards have also ended up establishing their tax residency in non-EU countries and they have real estate properties in Spain and decide to lease them.

As I explained in my posts on 26/12/2017 and 11/5/2020 I am absolutely certain that this discrimination infringes the European Union Rule of Law and specifically, article 63 of the Treaty on the Functioning of the European Union (TFEU) which prohibits “all restrictions on capital movements between Member states and between Member states and third countries”.

Such unfavourable and discriminatory tax treatment discourages non-EU citizens, taxpayers or legal entities, from investing in real estate properties in Spain, which constitutes a restriction on free capital movements (article 63 TFUE) which has no justification based on article 65 TFUE since the situation of the EU-and non-EU landlords is not the fact that it is comparable but that it is absolutely identical.

On the date 6/7/2018 I submitted a complaint before the European Commission against this discrimination of non-EU residents with leased real estate properties in Spain. At the end of June 2019, the European Commission notified me that it has registered the aforementioned complaint with reference number: CHAP(2018)2317, which would be processed as soon as possible and after the respective investigations, I would receive a final reply. Two and a half years have elapsed since my complaint and I have not received any reply, hence on 9/3/2021, I submitted a complaint before the European Ombudsman.

The European Commission is NOT obliged to initiate an infringement proceeding, even in the case that it is considers that there has been an infringement of EU Law, which in this case is more than evident.  Perhaps this will encourage the European Commission to initiate said infringement proceeding if numerous affected parties file complaints against this clear violation of EU Law, explaining their specific cases, the brutal tax differences in relation to the non-resident EU landlords and in relation to resident landlords in Spain.

Said claims may be submitted requesting their CONFIDENTIAL treatment by the European Commission, so that the identity of the complainant or any other element of the submitted information is not disclosed.

The presentation of the complaint shall not solve the specific problem of the injured parties, who must request (before the law prescribes them, after 4 years) the rectification of the income tax statements presented for the Non-Resident Income Tax (IRNR) paying a 24% rate on the gross rents (Forms 210 to be filed quarterly) and the return of the undue income, which was overpaid in relation to the EU landlords (who would pay a 19% rate on the net income) or even with the resident landlords of houses (which in the IRPF statement apply a 60% reduction on the net income). Shortly, I will publish the FORM TO SUBMIT THESE REQUESTS FOR RETURNS OF UNDUE INCOME for non-EU landlords

In any case, if the European Commission receives numerous complaints and ends up initiating an infringement proceeding against Spain, this would pave the way so that the Spanish courts or even the Tax Administration itself decide to cease applying the discriminatory legislation and agree upon the requested returns, due to the primacy and direct effect of EU law. And the legislator would end up amending the legislation to terminate this discrimination.


Through the following link:



For the persons who decide to submit the complaint, I would be grateful if after its presentation, please send a brief e-mail to: notifying me that it has been filed. KINDEST THANKS IN ADVANCE!!!!!!!


  1. Information about the complainant

I present this claim

*in my own name

Data of the interested party

Indicate name and surnames, address, country, e-mail, etc.

(*****Later on, in SECTION 10, you may request the European Commission for CONFIDENTIAL treatment of the complaint******)



  1. Data of the administration or organization that is object of the complaint

In this section, two mandatory boxes will indicate the following:


-Country: SPAIN


  1. National measures which you suspect of infringing the EU law

-National measures which you suspect of infringing the EU law:

In Spain, any NON-RESIDENT person who is the owner of a real estate property in Spain and decides to rent it must pay the Non-Resident Income Tax on the earned incomes, regulated in Legislative Royal Decree 5/2004, of 5 March.

-If this owner is a resident in another State of the European Union or the European Economic Area, according to article 24.6 of aforesaid Non-Resident Income Tax Act (hereinafter, IRNR), said party must pay the IRNR on the earned net income. From the collected rents, it is possible to deduct all the expenses related to the real estate property (repairs, municipal taxes, Property-Owner Association/Community expenses, interests on loans invested in the acquisition of the real estate property or its improvement, etc.). It is also possible to deduct a major expense such as the amortization of the property (3% of the value of the building) In short, the owner will pay a 19% rate on the earned net income, according to article 25.1.a) of the IRNR Act.

-If this owner is resident IN A NON-EU COUNTRY, pursuant to article 24.1 of said IRNR Act, said party must pay the IRNR on the collected gross rents, without being able to discount any expense related to the real estate property. Likewise, said party must may a 24% rate, according to article 25.1.a) of the IRNR Act.

The tax differences which result from this legislation are VERY SIGNIFICANT, absolutely disproportionate and unjustified (because in the immense majority of cases, it involves Non-EU residents in countries which have subscribed a Double Taxation Agreement with Spain, with the option to exchange relevant tax information), which undoubtedly infringes the EU Law and specifically 63 of Treaty on the Functioning of the European Union which prohibits all restrictions on capital movements among Member States, however, also among Member States and third countries.

The aforementioned national measures radically discourage investment in real estate properties located in Spain by residents in third countries because if they attempt to make them profitable by renting them, they will be subject to much higher taxation, completely discriminatory in relation to the resident landlords in the European Union or the European Economic Area.

Furthermore, the obligation of non-residents with rented properties (both EU and non-EU) to file Non-Resident Income Tax on a quarterly basis, by presenting the Form 210 (Modelo 210) for each real estate property which they have rented, may infringe EU Law. Thus is it established in the Order EHA/3316/2010, of 17 December (which approved the self-assessment forms 210, 211 and 213 of the Non-Resident Income Tax, which must be used to file the earned incomes without mediation of permanent premises, etc.), which has been recently amended by Order HFP/1271/2017, of 21 December.

The obligation of non-residents with rented properties to file the IRNR every three months, and also presenting the statement (Form 210) for each real estate property which they have rented, entails a complexity and an element of indirect tax pressure which proves to be clearly discriminatory in relation to the residents in Spain with rented properties, who may be considered in an absolutely comparable situation, and who must declare the net income with these rents in the annual tax statement of the Personal Income Tax (IRPF) to be submitted in May/June of the following year.

EU Legislation which has been infringed in your opinion

If you know, indicate which EU provision is involved:

«Article 63 of the Treaty on the Functioning of the European Union

(Former article 56 TCE)

  1. In the framework of the provisions of this chapter, all restrictions on capital movements between Member States and between Member States and third countries are prohibited.
  2. In the framework of the provisions of this chapter, any restrictions on the payments between Member States and between Member States and third countries are prohibited.

 Likewise, note that the CJEU (TJUE in Spanish) jurisprudence has clearly stated in diverse judgements that the restrictions on the freedom of capital movements beyond the strictly EU scope can also infringe the UE Rule of Law. Among others, it is worth mentioning the following:

-Judgement of CJEU, of 17 October 2013, applied in the «Yvon Welte» case (C-181/12).

-Judgement of CJEU, of 10 April 2014, applied in the «Emerging Markets Series of DFA Investment Trust Company» case (C-190/12).

-Judgement of CJEU, of 3 October 2013, applied in the «Itelcar» case (C-282/12).

-Judgement of CJEU, of 19 July 2012, applied in the «Scheuneman» case (C-31/11).

-Judgement of CJEU (Fifth Chamber), of 24 November 2016 (C-464/14).


  1. Problem description

In this section, the affected party can explain the specific case, showing the difference of being taxed as an EU citizen and being taxed as a Non-EU citizen, indicating, although in an approximate way, the annual amount of the rents and the annual amount of the expenses (indicating different expense items).

Said party can explain the specific case, following the example below, or simply copying the following example, if they prefer not to state the specific case:

Thus for example, a NON-RESIDENT who purchases a real estate property in Spain for 300,000 Euros (the building supposing approximately 60%), and rents it for 1,000 Euros per month (12,000 Euros per year):

-If said party is an EU resident, they may discount for example, the Property-Owner Association/Community expenses and municipal taxes, which can easily amount to approx. 2,500 Euros per year, and said party can also discount approx. 5,400 Euros as amortization (300,000 x 60% building x 3%), in such way, that it will amount to a net income of 4,100 Euros on which it will be necessary to pay 19% rate for the IRNR = 779 EUROS.

-If said party is a NON-EU resident, said party CANNOT discount any expense and on the gross rent of 12,000 Euros, it will be necessary to pay a 24% rate for the IRNR = 2,880 EUROS. This means that the Non-EU resident must pay 269% more than the EU resident, almost four times more. The Non-EU resident is obliged to pay a 24% rate on that gross rent, which in this specific case, actually involves paying SIXTY PERCENT on the net income (4,100 x 70.24% = 2,880).

And if this involves a real estate property with even higher expenses (for example, repair and conservation or interests because it has been purchased with loans, etc.), it is common that the EU resident owners must pay little tax or even nothing (because they may have losses), while the NON-EU resident owners must continue to pay a high IRNR (no less than a 24% rate on the gross rent) on a NON-EXISTENT profit.

THERE IS NO JUSTIFICATION FOR LEGISLATION LIKE THE SPANISH REGULATIONS WHICH ESTABLISH UNEQUAL TREATMENT between non-resident property owners in Spain who decide to rent them, who are in an absolutely comparable or even identical situation, solely due to the fact that several residents live in Switzerland or in the USA and others reside in Germany or France, among other reasons, because Spain has subscribed Agreements to prevent Double Taxation with numerous non-EU Countries which facilitate the exchange of tax information between the competent authorities.

And even if there were justification for this difference in treatment, the resulting tax differences are absolutely disproportionate. OBLIGING NON-EU TAXPAYERS TO PAY IRNR AT A 24% RATE ON GROSS RENTS CAN EASILY ENTAIL TAXING THE NET INCOME AT RATES OF 40%, 50%, 70% AND CAN EVEN MEAN HAVING TO PAY A HIGH TAX ON NON-EXISTENT PROFITS.

Article 65 TFEU allows a differentiated treatment in relation to third countries, but these measures “should not constitute an arbitrary discrimination measure or a covert restriction of the free movement of capital and payments as defined in article 63”.

Does the Member State in question receive (or may receive in the future) EU financing related to the subject of your complaint?

*I do not know

 Does your complaint refer to an infringement of the EU Charter of Fundamental Rights? (mandatory)

*I do not know


  1. Supporting documents

Indicate all the supporting documents or evidence that you may remit to the Commission, if they request them.

Consider that it is not possible to attach any document in this phase, later on, if this is necessary, we could contact you.

Documents list:

The self-assessments of the Non-Resident Income Tax (Form 210) submitted as a Non-EU resident and paying a 24% rate on gross rents can be sent to the Commission, as well as the accrediting documents of the expenses related to the rented property whose deduction is prevented by Spanish legislation.


 7 Previous attempts to solve the problem

To all users:

The only way to directly solve your personal situation or to receive compensation is to undertake actions in the Member State which is involved. You will not be able to do this with the formal infringement proceeding initiated by the Commission.

Have you already undertaken an action in the Member State in question to solve this problem? (mandatory)


Why have you not undertaken any action to solve your problem in the Member State? (mandatory)

There is an appeal procedure, but it is too expensive.

And have you contacted any of the following EU institutions or services competent in problems of this type?

With none

Do you have knowledge of any action undertaken in the Member State regarding the problem which is raised in your complaint?



 8 Revise data

Revise the data which you have indicated in this form prior to sending it to the European Commission.

To insert changes, click the Back button to go to the previous pages.


  1. Security verification

Write the characters which you see in the image or click the «Retry» button to display a new code:


  1. Authorization

We request your permission to reveal your identity to the administration to which your complaint refers.

This authorization is optional but in some cases, the disclosure of your identity may facilitate the processing of your case.

Do you authorize the Commission to disclose your identity in your contacts with the administration to which you refer in your complaint?

Indicate NO if you want a CONFIDENTIAL TREATMENT of the complaint and YES in the opposite case.


Click the Submit button to send your complaint to the European Commission.

Upon receiving your complaint, the Commission:

  • registers and acknowledges receipt of the complaint in a period of fifteen workdays
  • examines the complaint in the next twelve months (the period may be longer if the case is especially complicated)
  • if necessary, propose transferring it to the most suitable litigation resolution mechanism.
  • informs the complainant about the evolution of the complaint.


Thank you for completing the form. The European Commission shall process it without delay.


Palma de Mallorca, 9 March 2021

Alejandro del Campo Zafra

Lawyer and Tax Consultant