It is the question we receive most often from the United States, and nearly always with the structure already in place: somebody recommended buying the flat through an LLC "for protection and for tax", and nobody asked what Spain would make of that LLC. This is what Spain looks at, where things go wrong and what we do about it.

Mark and Linda, a Delaware LLC and a flat in Marbella

The typical file. A couple from Austin buy an apartment in Marbella in 2023 for 450,000 € through a Delaware LLC of which they are the only two members, 50/50. In the United States the LLC pays no entity-level tax: their CPA treats it as a partnership and allocates the result between them. They use the flat for three weeks each summer and an agency lets it for about 90 nights a year, bringing in 27,000 € gross. Nothing has been filed in Spain since the purchase.

The questions are always the same: does the LLC file or do they, how much, does the tax treaty help, and what about the years already gone. Every answer depends on the first one.

The question that decides everything: what is your LLC in Spanish eyes?

Spanish law does not look at the label but at the legal nature. A foreign entity whose nature is "identical or analogous" to a Spanish income-attribution entity (a co-ownership or a non-commercial civil partnership) is treated as one: it pays no tax itself, and its members are taxed on their share (article 87 of the Spanish Personal Income Tax Act and article 37 of the Non-Resident Income Tax Act). If the LLC does not fit that category, Spain treats it as a non-resident company, and the LLC becomes the taxpayer.

The Dirección General de Tributos, the Ministry of Finance's rulings office, decides these cases one at a time, looking at how the entity is set up and how income is attributed at home. There is no blanket answer for "LLCs", and be wary of anyone who gives you one without reading your operating agreement, counting the members and checking which tax classification was elected with the IRS.

If Spain sees the LLC as…	Who reports the rent	What happens to the treaty
An income-attribution entity	Each member, for their share, on their own Modelo 210	Each member claims it with their own certificate of residence
A non-resident company	The LLC, as a non-resident taxpayer	Depends on the LLC proving it is a US resident for treaty purposes
An entity with business activity and premises in Spain	The entity itself, with an annual return (article 38 of the Non-Resident Income Tax Act)	Permanent establishment rules come into play

What the 2013 Protocol added for transparent entities

The Protocol amending the Spain–United States tax treaty, in force since 27 November 2019, added to article 1 a rule for income derived through fiscally transparent entities: the income is treated as derived by a resident of a State to the extent that State treats it as income of its resident. Put simply, if the IRS treats the income as Mark's and Linda's, the treaty can apply to Mark and Linda — provided they can prove it.

Proof is the weak spot. A transparent LLC often cannot obtain the IRS certificate of residence (Form 6166) in its own name; the members request it. Without that document the Agencia Tributaria, the Spanish tax authority, will not apply the treaty and will assess under domestic law.

The figures for the Marbella flat

The United States is neither in the European Union nor in the European Economic Area. That means 24 % on gross income, with no costs deducted, on Modelo 210 — whether the LLC files or its members do. With the numbers in this case:

Item	Amount
Gross rent for the year	27,000.00 €
Deductible costs (community fees, IBI local property tax, agency, depreciation)	0.00 € · not allowed outside the EU and EEA
Base for each member (50 %)	13,500.00 €
Modelo 210 on rent, each (24 %)	3,240.00 €
Total paid in Spain on the rent each year	6,480.00 €

For comparison: if they lived in Ireland, with 11,000 € of deductible costs, each would pay 19 % of 8,000 €, which is 1,520 €. Nobody made a mistake; that is the law, and it is worth knowing before buying.

From the 2026 rent onwards, the full year's Modelo 210 is filed from 1 to 20 April of the following year (15 April if the payment is by direct debit), under Orden HAC/623/2026. The weeks the flat is kept for the owners' own use may also give rise to a deemed income charge on the property; whether it applies and who reports it depends, once again, on how the LLC is classified.

A worry that does not apply to you: the special 3 % levy

Many owners arrive worried about "the 3 % tax on foreign companies that own Spanish property". It exists, but since 1 January 2013 it only reaches entities resident in countries or territories that Spain treats as tax havens (articles 40 to 45 of the Non-Resident Income Tax Act). An LLC formed in Delaware, Wyoming or Florida is not in that position. It is worth a second look if the LLC is itself owned by a company in a listed territory, because then the chain gets more complicated.

The day you sell: withholding, the gain and who reports it

Suppose they sell in 2028 for 600,000 €. The buyer must withhold 3 % of the price and pay it in with Modelo 211: 18,000 €. If the gain (sale price less the purchase price and its costs, with the depreciation of the letting years taken off the purchase price) comes to 150,000 €, the tax on a non-resident's gain is 19 %, whatever the country: 28,500 €. It is reported on a Modelo 210 for gains within three months of the end of the month the buyer has to pay in the withholding, and the difference of 10,500 € is paid.

Who files that return goes back to the first question: the members, each for half, or the LLC. And here the treaty does matter, because the United States will also want to tax the gain and the credit for the Spanish tax has to be coordinated. Your CPA works that out; we give them the Spanish figures and the supporting documents.

Using the house when the LLC owns it

If the LLC owns the property and the members use it without paying, that use may have tax consequences in Spain and probably in the United States, depending on how the entity is classified. It causes the most trouble and is the point least often explained when the structure is sold to you. Before assuming it does not matter, decide on paper how that use is documented.

If there are years you never filed

This is the most common situation: the flat was bought through the LLC, nobody mentioned Spain, and three tax years have gone by. Voluntary disclosure is possible with a surcharge and no penalty, as long as you act before the tax authority writes to you: 1 % plus one point for each full month of delay, and after twelve months 15 % plus late-payment interest (article 27 of the Ley General Tributaria, the General Tax Act). At 6,480 € a year, three unfiled years are still a sum that can be put in order calmly; three years plus an audit are not.

Where our work starts and where it stops

We do: work out from the LLC's documents how it should be reported in Spain, file the Modelo 210 returns that apply, keep the property's accounts, prepare the disclosure of past years and keep track of deadlines. We do not: advise on US tax law, prepare your federal or state returns, or handle your reporting obligations there. We work with the CPA you choose; we speak their language and give them the Spanish numbers they need. We will flag every risk we see, but no analysis of an LLC can guarantee how the Agencia Tributaria will classify it in an audit.

If you move to Spain with the LLC, the problem changes tax: it moves to Spanish income tax and Modelo 720 appears for what you hold abroad. We cover that under international self-employed and non-residents.