Taxes in Spain: Tax Rates and Special Expat Taxes
Posted by Dreamer
Information on income taxes and income tax rates in Spain, paying tax in Spain, special taxes, VAT/IVA, double taxation, taxes on property and real estate, and US forms and publications for expatriates living in Spain.
Expat Taxes in Spain
When you move to Spain, you may or may not have to file or pay taxes in your home country. Here’s a rough guide by country:
UK: Apply for certificate E101 to declare your tax paying status in Spain, negating your tax obligations in the UK. For more information on double taxation issues between the UK and Spain, see http://www.hmrc.gov.uk/cnr/dtdigest.pdf.
USA: See IRS Forms and Publications. In particular, Publication 514: Foreign Tax Credit; Form 2555 and 2555-EZ: Foreign Earned Exclusion; Form 1116: Foreign Tax Credit. You’re exempt for up to $80,000 while you live overseas. Detailed information on double taxation between the USA and Spain can be read here: spain.pdf.
Canada: Spain and Canada have a double taxation treaty; read it carefully to find out your tax obligations while overseas. If you plan to be in Spain for longer than two years, look into declaring non-resident status in Canada in order to avoid paying tax there during your absence. See a copy of that treaty here in PDF format.
Non-Europeans: The 16% VAT/IVA tax can be rebated for many items over €90. Keep your receipts and upon leaving the European Union and Spain, you’re able to receive that tax money back from the government. This mostly applies to tourists, but other medium-term expats as well, and can be completed at the airport and some tourist information centres.
Spanish Income Taxes
Spain’s fiscal/tax year is the natural calendar year. Income taxes in Spain should be paid between May 1 and June 30 for the previous year’s income. With a DNI or NIE, you can apply for a Número de Identidad Fiscal (NIF) in order to pay your taxes in Spain.
Tax residents will need to pay income taxes in Spain and are generally defined as those who reside in Spain over 183 days in each calendar year and/or have their main financial interests in Spain. However, in many cases you only need to file a tax return in Spain when you make more than €22,000 per year, receive a rental income of more than €1,000 and/or receive a capital gains and savings income of more than €1,600.
Personal allowances for Spanish income tax purposes are €5,151, which increases to €6,069 for persons over age 65 and €6,273 for persons over age 75.
Child allowances for Spanish income tax purposes are: €1,836 for the first child, €2,040 for the second child, €3,672 for the third child and €4,182 for additional children. In addition, Spain has a maternity allowance of €2,244 for each child under three years old.
Earned income above these allowances is taxed at the following rates:
|Income (above allowances)||Spain’s national tax rate||Provincial tax rate||Total tax rate|
|€0 - €17,707||15.66%||8.34%||24%|
|€17,707 - €33,007||18.27%||9.73%||28%|
|€33,007 - €53,407||24.14%||12.86%||37%|
|€53,407 and above||27.13%||15.87%||43%|
The provincial tax rate is only a guide. Some autonomous communities have different rates.
Income in Spain is roughly defined as:
- Wages and salaries, either as a salaried employee or as a businessperson
- Pension benefits
- Dividends, yields, interest and capital gains
- An employer’s pension contributions
- In-kind benefits