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.
Income taxes in Spain should be paid between May 1 and June 30 for the previous year’s income.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 tax rate for expats could be advantageousSpecial Expat Income Tax Regime in Spain As of 10 June 2005, the Spanish government approved a new tax regime for expatriates working in Spain. This was Royal Decree 687/2005. This tax rate for expats could be advantageous to avoid paying the upper levels of the rate table outlined above. In order to qualify, the expatriate must meet following:
Can you live on 1000€ per month? How much does a family need to live comfortably on the coast? What's the best city in Spain from a cost of living standpoint? Here we offer a cost of living breakdown focused on Madrid and Alicante, including the basic necessities and a detailed guide for estimating your costs.
A great article from Mark Wilkens of the Rights Group regarding the actual costs of buying property in Spain 2007.
Information on exchanging currency from sterling and dollars to euros for expatriates living in Spain.
Banks and banking for expatriates living in Spain. Includes information about: accounts for foreigners, Transferwise, Revolut, VISA cards, debit cards, transaction fees, online banking, cajas and foreign-owned banks.