To answer this question, the first thing that the real estate agent must analyze is whether he is exercising the activity in his own name or in another’s name and, to solve this question, he has to analyze the way in which he provides his services. The General Directorate of Taxes considers that the activity is exercised in its own name if any of the following circumstances occur:
a) If the agent knows and maintains a direct relationship with the tenants (this happens, for example, when the homeowner does not know the tenants, nor formalizes any contract directly with them, so that it is the agent who formalizes the contract of rent with the tenants; who gives you the keys and explains the operation of the elements of the house; who solves any problem that may arise, such as the loss of keys, the malfunction of any appliance, if the housing is dirty, if more towels, sheets, etc. are needed, to give some characteristic examples).
b) If the agent is the one who sets the conditions of the rental (for example, if the agent imposes that the cleaning of the house and the clothes is mandatory by the agent or a company hired by him; if he imposes the number and / or quality of towels, sheets, cribs, etc., with which the house must be equipped; the hours of entry and exit of the house; it is responsible for the repairs to be made and deducts the price of these from the amount to be paid for the rental, etc.)
c) If the agent is the one who orders the way to make the payment of the rent effective and receives the payment of the rent (for example, if it is the agent who imposes the payment conditions – except for the price, which is usually imposed by the owner), such as the amount of the reservation and the advance with which it must be paid, as well as the way to formalize the payment by the tenants, the date and the way in which the money will be delivered to the owner, etc.) And, above all , if the agent is the one who receives the rent money in his account, and then pays the owner. Although here we must indicate that the General Directorate of Taxes considers that, however, there is only a mediation in the payment when the tenant, when making the payment to the agent’s account, identifies the owner in the concept of the transfer or income and In addition, it quantifies the amount that corresponds to it; otherwise, the Directing Center considers that there is no mere mediation, but a provision of the service on its own behalf by the agent.
On the contrary, when the agent operates on behalf of others, they will simply contact the landlord and tenant, and between them they will formalize the corresponding vacation rental contract (as most frequently occurs in the intermediation of sales).
In the field of VAT, we must state that when the agent operates on behalf of others, they simply invoice their commission for the provision of their services subject to VAT at the rate of 21 percent. As for direct taxes, except for special cases in which the owner’s rent constitutes a business activity for him, he must not carry out withholding for the Income Tax of the Individuals, the Corporation Tax or the Non-Resident Income Tax .
On the contrary, when the agent operates on his own behalf (given any of the circumstances indicated above), in relation to VAT, he must obtain an invoice from the owner for the rental to the real estate agent subject to the rate of 21 percent and, at in turn, the real estate agent must issue an invoice to the tenant for the rental of the home that, if the agent is obliged to provide any complementary service of the hotel industry, will be subject to VAT at the rate of 10 percent and, if the Agent does not provide any of these complementary services typical of the hotel industry, must not pass VAT. We must indicate that the owners not resident in Spain, if they do not provide any business activity, but only the rent, must not pass VAT, but that the real estate agent must pass and deduct, where appropriate, the VAT by application of the “investment of the passive subject”. With regard to direct taxes, in addition, the agent must make a withholding tax of 19 percent if the owner is resident in Spain, or in another state of the European Union or the European Economic Area, or 24 percent in case of residence outside the previous territories.