Tax rate in Spain
for British nationals
Economists specialized in non-resident taxes
Non-resident taxes after Brexit
Tax legislation in Spain is complicated and in constant evolution, therefore, it is necessary to have technical knowledge to avoid potentially severe fines and penalties. Since Spain has become one of the most popular destinations for expatriates to relocate or set up to acquire properties, understanding the different taxes that exist in Spain is vital. Staying on top of taxes in Spain is made even more difficult by the Spanish government, which regularly changes its tax rules and is often the hardest hit by expatriates with significant assets abroad.
In Spain, you are considered to be a tax resident if you spend more than 183 days in Spain during the Spanish tax year (calendar year) or if your main professional activity or most of your assets are based in Spain. You can also be considered resident if your spouse and/or minor children live in Spain (unless you prove otherwise). There is no split year treatment; you are either resident or non-resident for the whole year.
- Estate planning
- Non-resident Income Tax
- Declaration of assets abroad
- Personal Income Tax
- Wealth Tax
- Inheritance tax and donations
Frequently Asked Questions (FAQ)
Residence for natural persons: It will be understood that a person has their habitual residence in Spanish territory when they remain in Spain for more than 183 days during the calendar year. To determine the period of stay in Spain, sporadic absences will be counted, unless the taxpayer proves their residence. In addition, it could be considered that the taxpayer has his habitual residence in Spain, when the main nucleus or the base of his activities is in Spanish territory, or the residence of the spouse and children is Spain.Residence of entities and legal persons: Law 27/2014, of the IS, in its article 8.1 establishes that the entities that:- They had been established in accordance with Spanish law. - Have their registered office in Spanish territory. - Have the effective management headquarters in Spanish territory.
Non-residents must register to pay taxes in Spain, at the Tax Agency, the Spanish tax authority. For this reason, you will need your identification number in Spain (NIE), which you can obtain through the embassy, consulate or the Foreigners Office at the police station, within 30 days of your arrival in Spain.
Double taxation agreements are international treaties that contain, in particular, measures to avoid and / or eliminate international double taxation; they can be bilateral and / or multilateral.
Spain has signed numerous treaties with other countries to avoid double taxation. The Spanish tax authority (Agencia Tributaria) maintains an updated list of treaties.
The general income tax rate for non-residents is 24%, or 19% if you are a citizen of an EU / EEA state.
Other income is subject to Spanish non-resident taxes as follows::Capital gains resulting from transferred assets are taxed at the rate of 19%. Investment interest and dividends are taxed at 19%, although they are typically lower through double taxation agreements. Interest tax is exempt for EU citizens. Royalties are taxed at 24%. Pensions are taxed at progressive rates, from 8% to 40%.
There is a special tax regime for foreigners who come to work in Spain with an employment contract with a Spanish company. This is sometimes known as Beckham's Law, as it was supposedly established so that footballer David Beckham would not have to pay taxes on his image rights around the world when he joined Real Madrid in 2003. The Spanish government modified this regime tax for fiscal year 2021.
Employees assigned in Spain pay a tax rate of 24% on income up to 600,000 euros. Under the new tax law for 2021, the government has increased the tax rate on income exceeding 600,000 euros to 47%. Additionally, assigned employees now pay a 3% tax on income over € 200,000 that is generated from dividends, interest, or capital gains.
If you are a tax resident in Spain (you spend more than 183 days a year in Spain) and you have not been a resident in Spain in the last 10 years, you can apply for taxation under this regime within the six months following your arrival in Spain. Consequently, you can lower your tax bracket for up to five years. .
If the taxpayer has been living in Spain for six months (183 days) or more of the calendar year (not necessarily consecutively) or has his main vital interests in Spain (for example, his family or company is in Spain), then he is classified as a Spanish resident for tax purposes They are obliged to declare (either by confirming a draft through Renta WEB or by submitting a return) all taxpayers natural persons residing in Spain, except those who have exclusively received income from: /strong>
Income from personal work, equal to or less than 22,000 euros per year
- As long as they come from a single payer.
- When there are several payers, as long as the sum of the second and subsequent ones in order of amount does not as a whole exceed the amount of 1,500 euros.
- The limit is set at 12,643 euros per year in the following cases:
- When the work income comes from more than one payer and the sum of the amounts received from the second and the rest in order of amount exceed the amount of 1,500 euros per year.
- When compensatory pensions are received from the spouse or annuities for non-exempt food.
- When the payer of income from work is not obliged to withhold.
- Income from movable capital and capital gains subject to withholding or deposit on account, with a joint limit of 1,600 euros per year.
- Imputed real estate income, yields from treasury bills and subsidies for the acquisition of officially protected or priced-priced homes, with a joint limit of 1,000 euros per year. In any case, those who obtain full income from work, capital or economic activities, or capital gains that together do not exceed 1,000 euros, nor those who have had, exclusively, capital losses less than 500 euros will not have to file a declaration.
On January 1, 2021, the Spanish government implemented two new tax reforms: the financial transaction tax (ITF) and the digital services tax (DST). The reforms increased taxes primarily for large corporations and high-income individuals. Below are the basic Spanish tax rates on earned income. Since tax rates in Spain are not uniform across the country, however, your total liable tax will be a calculation of the general state tax rates plus the relevant regional tax rates. Spain's tax rates in 2021 are as follows: UntilHasta 12.450 €: 19% 12.450 €– 20.200 €: 24% 20.200 € - 35.200 €: 30% 35.200 € - 60.000 €: 37% 60.000 € - 300.000 €: 45% more of 300.000 €: 47% Also in 2021, the taxation of savings income over 200,000 euros increased by 3%.
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