The low down on the new court ruling re Non-EU property owners being able to deduct short term rental expenses from the income earned on their property in Spain. There has been a recent court ruling in Spain to allow non-EU (non-EEA) property owners to deduct expenses from their rental income — effectively allowing taxation on net income rather than gross — where previously that was disallowed. Under Spain’s rules regarding income for non-residents (IRNR, declared via Modelo 210), the usual approach was:If you are a non-resident and are not an EU/EEA resident, your rental income from Spanish property was taxed at a flat rate of 24% on gross rental income (i.e. EU/EEA nationals living outside Spain) were taxed at 19% on rental income, and were allowed deductions for expenses attributable to the rental. Therefore, taxation should be (or at least can be) on net income (gross minus allowable expenses) rather than on gross income alone.