Holiday rental licences in Spain

Spanish rental industry has experienced changes since the Spanish law on urban lettings was amended last year and set standards like introducing licences fees for short-term holiday rentals. Since then you can rent your Spanish home out as a furnished holiday let as far as you have previously obtained the required licence from the Town hall. Licence fees amount varies from one town to another, being it more expensive and complicated to obtain in larger cities and touristic places located by the beach or in the mountains. Requirements for the touristic licence for holiday let are ruled by every regional autonomous community (there are seventeen regional autonomous communities in Spain). Some Spanish local administrations require that the property is registered with a speacial registry for touristic business.
Many clients ask to us whether they will have to pay taxes in Spain upon letting their holiday home, well, as far as you are receiving a rent, 21% income tax (irpf) should be paid to the Spanish tax man and 21% VAT should be charged to the tenant.
Failure to comply may lead to hefty fines.