Tax in Spain
Taxes are everywhere. And moving to Spain won’t make them go away. In fact, they will become a crucial part of your new life in the country (no matter if you are a tax resident or not.
Who must pay taxes in Spain?
Of course, Spanish nationals who live in the country must pay taxes. But foreigners too.
And even though there are important differences when it comes to the taxes to be paid depending on if you are a resident or not, both tax residents and non-residents must pay taxes in the Spanish territory.
Nevertheless, what is key here is understanding which are your specific tax obligations, and the different paths available to optimize your situation and avoid paying extra (which, in many cases, it is entirely possible to do.
So as long as you live in Spain, conduct any kind of economic activity in the country, or simply own any kind of assets, you will have to pay taxes.
How the Spanish taxation system works + filling your tax return
Understanding taxes should not be that complicated.
Unlike many countries (let’s say, the UK), the Spanish tax year goes from January to December, corresponding to a natural calendar year.
This just helps you understand the duration of the different tax obligations that will arise according to what you do in the country and your situation in general.
What does that mean?
That all the tax obligations that are created from the 1st of January to the 31st of December are packed together, and you will have to declare and pay them during the following year.
You will have to file your taxes from the 1st of May until the 30th of June of the following year. Not doing so in time means important economic penalties, so make sure to save the date and be prepared in advanced.
Nevertheless, if you earn less than 22.000€ per year and that money just comes from just one payer (let’s say, one company), you don’t need to file this income tax return.
In order to realize that payment, you will need to be tax-identified against the corresponding institutions. This means that you will need your NIE number, which is the identification number you will need as a foreigner to formalized any kind of legal procedure.
All the tax-related issues in Spain, both for residents and non-residents, are regulated by the Spanish Tax Agency.
Are you a tax resident or a non-resident?
In order to exactly understand which concrete taxes you will pay in Spain and at which exact rate, the first thing you must do is to know wheter you are a tax resident or not.
This distinction just works for tax issues, and has nothing to do with the residence permit, and that allows you to legally live y in the country.
This means, perhaps you have a residence permit in Spain, but if you don’t meet the requirements, you may not be regarded as a tax resident for tax purposes.
Then, how do I know if I am a tax resident in Spain or not?
You will be considered a tax resident if you meet just one of the three following requirements:
- You live in Spain more than 183 days per calendar year, from January to December (note that the days don’t need to be consecutive in order to count).
- You have economic interests in the country, meaning that you realize your professional activity in Spain, whether you work for a company or you are self-employed. This is the typical case of someone who is hired by a Spanish company but spends the vast majority of the year traveling and meeting clients around the globe.
- Your spouse and/or children live in Spain.
Here at The Expat Centre we regularly hold free talks to help you understand your tax situation and then you can follow up with our Tax. Specialist who can deal with your own personal situation.
Email us for information – email@example.com