Resident and Non-Resident Taxation in Spain
Spain is a very strict country in terms of the penalties that it gives to those who fail to properly pay their taxes and it is also a country, that frequently changes its tax legislation. To avoid any issues and to ensure that you don’t receive any such penalties, our international legal agency can assist you with determining whether or not you should be paying resident or non-resident taxes, can assist you in calculating the correct amount of taxes that need to be paid, can keep you up-to-date on the current tax rules and regulations and can also ensure that your taxes are paid on time. We are pleased to provide you with all of the pertinent details regarding resident and non-resident taxation in Spain.
What is the Difference Between Resident and Non-Resident Taxes in Spain?
Resident Tax in Spain:
A person is considered to be a resident in Spain and is therefore required to pay resident tax if they have lived in the country for a period of 183 days or more, throughout the course of one full calendar year. They are also required to pay resident tax if they are employed within the country or one of Spain’s territories.
If you qualify to pay resident tax in Spain, based on the above criteria, you will be required to pay tax on all of the income you have earned (combined from employment, pensions, rental income etc.) and also on any interest earned from savings and investments. You are required to pay taxes on all of the above listed sources that have been acquired not only in Spain, but from anywhere in the world.
Non-Resident Tax in Spain:
If you have spent a period of less than 183 days in the country, then you are considered as a non resident tax Spain purposes. In case you own a property in Spain, there are two main taxes that a non-resident is required to pay and these are the IBI (or Council Tax) and either the Rental Income tax or Imputed tax depending on whether you rent your property out for income or not. If you own a property that does not have a building on it, you are considered exempt from the Imputed tax, and therefore are not required to pay it. There are two options when paying your non resident income tax Spain, they may be paid either once per year in one large, lump sum amount or they may be paid in smaller amounts at quarterly intervals. The form that is required to be completed and submitted to the Spanish tax authorities is called the non resident income tax form 210 Spain and our team of legal experts at Lusa Legal would be happy to assist you in obtain this form and correctly completing it.
How Much is Non-Resident Tax in Spain?
Tax Value in Spain for non-residents is 24%, however in special cases, as for dividend payments, could be taxable to 19%. For residents of Spain, the average tax rate can range anywhere from 19% to 45% depending on the amount of income that you are bringing in.
Under Spanish law there are numerous different tax allowances that can be applied for if you are a resident of the country. Tax allowances based on age, the number of children in the household, marital status and disabilities can be applied for.
Beckham Law is another allowance that provides a tax break for those who are relocating to Spain to work. These new residents can apply for this credit which will allow them to pay the same as a non-resident , therefore usually an advantageous rate. The Beckham Law allowance can be implemented for the first six years of working in Spain.
Important Points to Remember About Spanish Taxes
- The Spanish tax office does not send tax forms or reminders to any address that is outside of Spain.
- The tax year in Spain runs from January 1st to December 31st.
- It is the tax payer’s responsibility to ensure that all taxes are paid on time and that the correct amount owing is paid.
- If taxes are not paid on time then interest charges and sanctions may be incurred.
- A new property may not be purchased if there are past due taxes that have not been paid.
- Those individuals that are considered residents of Spain, with assets of over €50,000 located outside of the country, must declare these assets on their annual tax return. These assets include investments in foreign bank accounts, houses or property, life insurance policies etc.
Lusa Legal is your tax professionals in Spain
At Lusa Legal, we are pleased to be able to offer our Spain tax expertise with you all year round. We can ensure that your taxes are filed correctly and on time to avoid any penalties. We can also ensure that you are kept up-to-date on the ever changing Spanish tax laws, help you complete your tax forms and answer any questions that you may have. Call Lusa Legal today: +34 605 33 60 90.
* Estimated service price, total amount will depend on the particular case and additional services required.
VAT is not included in the price.