Blog Post
Andrés Glennen

How to correctly and easily declare income taxes in Reental

Hello everyone! As we know, we are in the middle of the tax filing season to the tax agency, which can generate a lot of doubts and questions. Therefore, we have prepared a complete summary so that you can keep everything clear and avoid any complications in the process. In this article, you'll find all the information you need to file your taxes correctly. Let's get started!”

First of all, there are 2 factors that determine taxation.

  1. Type of income received.
  2. Investor's tax residence.

This entire article will focus on the tax relationship that REENTAL investors will have with your country's Tax Agency

What type of benefit do I receive from Reental?

At Reental you will receive 2 different returns on your investment, the first monthly dividends which are considered to be returns of REAL ESTATE CAPITAL, after all, it is for the operation to rent the property and receive the monthly rent. And the second occurs when Reental sells the property, this sale gives rise to a EQUITY VARIATION.

What taxes do Reental investors have to declare?

DIVIDEND COLLECTION

Resident investor (Spain and EU)

The return of income from movable capital is made in the personal income tax return, also known as “Income”. If you are a tax resident in Spain or the European Union, Reental will automatically deduct 19% of the amounts claimed, unless your country of residence has a special agreement with Spain, as is the case of Portugal and Italy, in which case a different rate will apply, which you can find by downloading the file “Retention List” which we enclose in this article. These withholding payments are made by Reental using form 123 and the annual information statement, model 184.

The investor does not have to do anything, the withholding will appear on the draft of the income.

In the case of not EU residents of Spain but of the EU (including Iceland and Norway) the payment of these amounts is made upon presentation of form 123 by Reental, the non-resident taxpayer must report them in their personal declaration of their country of residence.

NON-resident investor

Reental's treatment for investors who are not tax residents in Spain or the EU It is to perform, as a general rule, a Retention of 24% in their claimed income from income from movable capital, unless your country of residence has a double taxation treaty with Spain, for example Argentina with a withholding of 12%

In this case, the applicable rate may vary depending on the agreement signed between the two countries and Reental will automatically calculate the corresponding specific withholding.
If your country is not in the “Retention List” file that we attached to this article, we leave a link that details the applicable retention rates in each of the 91 countries that have double taxation treaties with Spain. The non-resident investor must report them in their personal declaration of their country of residence. 

CAPITAL GAIN COLLECTION

In this case Reental does not report anything, since, this procedure is personal to each taxpayer depending on their particular condition because, they must take the total of the capital gains not only in Reental but in their other investments such as the sale of a property in their name. The tax for this operation is as follows:

  • 19%
  • 0€ - 6,000€
  • 21%
  • 6,001€ - 50,000€
  • 23%
  • 50,001€ - 200,000€
  • 26%
  • +200,000 €


If the investor's country of residence did not have a double tax treaty with Spain, the tax bracket would be fixed at 19%. For non-residents, the taxes will be the same as those mentioned for movable capital income.

ONCE THE WITHHOLDING PERCENTAGE HAS BEEN APPLIED, HOW DO I OBTAIN THE CERTIFICATE TO SUBMIT IT TO THE TAX AGENCY?

It is important to note that Reental will provide the certificate to all investors. The withholding certificate issued by Reental contains the corresponding information on the amounts received and the withholding made to the investor. Once obtained, you can submit it to the corresponding tax agency in your country.

What if I reinvest the dividends?

Reental will not apply any withholding, so you can reinvest the entire amount in new properties. This way you can proceed to reinvest all capital and in exchange you will get new tokens until the properties represented by those tokens are sold. So you will only declare for capital gain without Reental making any withholding throughout the process for capital income and thus optimize your investment.

Roundup
In short, in the case of monthly dividends, Reental makes the withholding and is the one who pays them into the tax agency and then the investor declares these returns in his return. If you are not a resident, you must mention your country of residence in your declaration, taking into account that you have already made on-account payments for such income. In case of sale of the final token, the investor declares it according to their personal conditions. Reental does not withhold or report anything, so this communication of capital gain is on the investor's side if it occurs.

 

In order not to miss any of the opportunities we present, we recommend that you join our group of Discord or Telegram to get to know the other Reental and the whole team. Of course we invite you to take a look at our articles on the blog to continue informing you.

Welcome to the new way of doing finance, welcome to Reental.

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