Income Tax 

When it comes to Income Tax or Impuesto Sobre La Renta there are two different tax systems you can choose from:

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The first option is known as the "15 / 15 Tax".
The way this system works is you deduct 15% on your rental income and pay 15% on the remaining balance. in other words, you pay a 15% tax rate on 85% of your income.
This system intertwines with the monthly sales tax filing, payment and digital invoicing. However, it eliminates the need to file an expense report. This system is perfect for property owners who do not have an employee or caretaker.

 

The second option is only applicable if the corporation has an employee or caretaker. In this case, expenses including maintenance are deducted from the rental income and taxes are paid on that remaining balance. The tax rate varies and it is determined by the properties' net income. These rates are listed and published by the General Directorate of Taxation, in Spanish "Direccion General de Tributacion" and they range from 15 to 30%, depending on your gross revenue. The down side to this option is that if you do choose it you have to comply for 5 years.