Tomás is a lawyer in Madrid and practises as a self-employed person from an office he rents from a limited company (sociedad limitada). He pays 1,500 € of rent and 90 € of community of owners' fees that the owner passes on to him, plus VAT. In July he was also charged the year's IBI (the municipal property tax), 720 €. When he asked us how Modelo 115 is paid, what he really wanted to know was something else: how much he had to transfer each month to the company, how much to Hacienda (the Spanish tax authority), and when. The 115 is paid properly if the rent bill is built properly, and almost every mistake starts with the bill.
From the rent bill to the payment to Hacienda
The 19 % withholding is calculated on everything paid to the landlord for the lease, rent and expenses passed on, but without the VAT. Tomás's monthly bill looks like this:
| Item | Amount |
|---|---|
| Rent | 1,500.00 € |
| Community fees passed on | 90.00 € |
| Withholding base | 1,590.00 € |
| VAT (21 % on 1,590 €) | + 333.90 € |
| Withholding (19 % on 1,590 €) | − 302.10 € |
| Transfer to the landlord company | 1,621.80 € |
The 302.10 € is not paid to anyone at that moment: it stays in Tomás's account until the following quarter. Three months later, the 115 gathers three withholdings: 906.30 €. That is the amount paid with the Modelo, not a new one.
When each euro of withholding arises
The obligation to withhold arises when the rent is paid, and the withholding is declared in the quarter in which it was made. That has consequences few people notice:
- IBI passed on once a year. The 720 € in July carries its own withholding, 136.80 €, and goes on the third-quarter 115. That quarter Tomás pays in 906.30 + 136.80 = 1,043.10 €.
- Payment in advance. If a tenant pays six months in advance, the withholding on all six goes in the quarter in which they paid; it is not spread out.
- The deposit. It is not rent but a guarantee that is returned. It carries no withholding, and putting it in the base is a mistake that harms the landlord.
- Arrears. If in March you pay the January and February rent you owed, the withholding goes in the first quarter, because that is when you paid.
The dates and the ways to pay
The 115 is filed from 1 to 20 April, July, October and January. Payment can be made in three ways. By direct debit, giving the account when filing, only until the 15th: the charge is made on the last day of the period. By account charge from the tax agency's own online office (sede electrónica), which generates the full reference number at the same moment. Or with an NRC (the payment reference code) obtained beforehand through online banking, with the exact Modelo, period and amount. In all three cases the 115 is a separate return: even if it is filed on the same day as the 111 or the 303, each carries its own payment and its own receipt.
The landlord being a company changes nothing in the mechanics. The withholding is the same, 19 %, and goes on the same Modelo; the only difference is that the company will deduct it in its Impuesto sobre Sociedades (corporate income tax) rather than in an IRPF (personal income tax) return. What does change the mechanics is the landlord being resident outside Spain: then the withholding does not go on the 115 but on Modelo 216, with its own rates, and it is worth knowing that before the first bill.
If you have several premises or several landlords, all the quarter's withholding goes on a single 115, with the total. The breakdown by landlord and by property is not given here but in the annual summary, Modelo 180, which is filed in January.
If you would like us to check how your rent bills are set up before the next quarter, leave us your details in the self-employed form: with the contract and two bills we can see whether the base and the calendar are right.
Tomás's year in four payments
With the bill properly set up, the annual 115 calendar can be foreseen from January:
| Quarter | Filed and paid | Withholding included | Payment |
|---|---|---|---|
| First | 1-20 April | 3 bills of 302.10 € | 906.30 € |
| Second | 1-20 July | 3 bills of 302.10 € | 906.30 € |
| Third | 1-20 October | 3 bills + IBI passed on | 1,043.10 € |
| Fourth | 1-20 January | 3 bills of 302.10 € | 906.30 € |
| Total for the year | 3,762.00 € | ||
That total is also the figure that will appear on the January Modelo 180 and on the certificate the landlord company will receive. If any one of the three does not match the other two, there is a mistake somewhere.
Two situations change the calendar. If you move premises in the middle of a quarter, that 115 gathers the withholding for both landlords together and the 180 separates them. And if you give up the premises and will not be paying any more rent, you have to notify the end of the obligation on Modelo 036; otherwise the census (the tax register) will go on expecting returns and requests (requerimientos) will arrive for quarters with nothing to pay.
Withholding is among the debts that article 65.2 of the Ley General Tributaria (the General Tax Act) declares cannot be deferred. You cannot ask for a payment schedule for the 115: the application is declared inadmissible and the debt runs its course. If one quarter there is no money, the right thing is to file on time with an acknowledgement of debt (reconocimiento de deuda), so as not to add an offence, and pay as soon as possible to stay within the 5 % enforcement surcharge. On Tomás's 1,043.10 € for the third quarter that would be 52.16 €. The full list of what cannot be deferred is in the debts that cannot be deferred.
Sometimes the owner insists on receiving the full rent and offers to «sort it out himself» in his own return. That is not an option. If you pay the gross amount, you are still obliged to pay over the withholding, and you will end up paying it out of your own pocket. The obligation to withhold is yours, and an agreement between the parties does not change it. If the owner wants to receive a clean amount, what has to be renegotiated is the rent, in writing and knowing what that means, not skipping the withholding.
What almost nobody tells you: the certificate and the January cross-check
Every year, before the landlord files their return, you have to give them a certificate with the withholding made. Tomás's landlord company uses it to deduct the withholding in its corporate income tax, and a private individual would use it in their income tax return. That certificate, the January 180 and the year's four 115s have to tell the same story. The Agencia Tributaria cross-checks what you declare you withheld against what the landlord declares was withheld from them. When it does not match, it asks both of you.
And a last cash-flow tip, the same one we give for all withholding: set the money aside on the day the rent is paid. A sub-account into which the 302.10 € of each month goes, and out of which only the 115 is paid, turns the 20th into a formality and makes it impossible to discover in October that the money for July's IBI has already been spent. The quarter's other obligations are in the guide to Modelo 303 for the self-employed and the overall view of withholding in Modelos 111 and 115.