Taxes in Spain for expatriates

Hello everyone. Taxation in Spain for expatriates is undoubtedly a topic that raises many questions. We’re going to try to explain this in simple terms by summarising the main taxes applicable to expatriates in Spain.

3 Basic aspects of taxation in Spain 

There are three points to bear in mind before listing the taxes applicable to expatriates in Spain.

1- The tax year in Spain corresponds to the calendar year, that is to say, it runs from January to December. In this respect, we differ significantly from other tax years both in Europe and worldwide,

2- All taxes due must be paid between 1 May and 30 June of the following year.

3- To pay your taxes, you must have a NIE number. This is really the only form of identification you need to make payments. 

Distinction between tax residents in Spain and non-residents

This distinction between Tax resident and non-resident, relates solely to tax matters and, of course, has no connection whatsoever – either direct or indirect – with holding the residence permit required to live legally in Spain.

How can I find out if I am a tax resident in Spain?

• If you live in Spain for more than 183 days in a calendar year. You can also add up several periods within the year.  
• If you have financial interests here, whether you are carrying out a professional activity in Spain, working for a company or are self-employed.
• If your spouse and/or children live in our country.

What are the tax rules in Spain for expats?

Let’s list the taxes that every expatriate is obliged to pay in Spain if their activities give rise to such an obligation.

1. Income Tax

If you are certain that you are a Spanish tax resident, you must pay income tax on your worldwide income and profits. 

2. Tax on Non-Residents

This specific type of tax must be paid by non-residents who let out their property in Spain or own any other type of asset of any kind that generates an income for them.

3- Wealth Tax in Spain

 If you own a property in Spain, you must pay Wealth Tax in Spain. In this case, it does not matter whether you are a tax resident or not

4- Inheritance tax (Estate tax)

If the property you are going to inherit or bequeath is located in Spain, Spanish inheritance tax must always be paid, regardless of which country the beneficiary is in.

5. Income tax (capital gains)

If you are considered a resident in Spain, you will have no choice but to pay between 19% and 23% in respect of the tax due on the profit made from the sale of, for example, a property or shares. 

6- Taxes on the purchase of a property. Property transfer tax (Transfer Tax)

• Property transfer tax / Property Transfer Tax: This is a progressive tax levied on second-hand properties
• VAT: For anyone buying a property directly from a developer

We can calculate taxes in Spain for expatriates in advance

At Meridional, we offer a calculation service to help you understand your tax position in advance. We can advise you on which taxes you are liable for and the exact rates, so that you pay only the minimum amount of tax required.

How can you access this calculation in advance?

It’s very simple: just send us an email at: welcome@meridionalteam.com

In this email, please provide us with the following details:

1. Whether or not you are a tax resident it is

2. What is your income in Spain?

3. What is your business activity?

4. If you own a property or are planning to sell it

We will work with you to find the best way to optimise and organise your tax affairs in Spain.

Don’t miss this chance to find out in advance which taxes you’ll have to pay and how much it’s going to cost you!

By now, you have a slightly better understanding of all the different types of tax you have to pay in Spain as an expatriate. In very general terms, you also know that there are significant tax differences depending on whether you are a tax resident or not.

But the most important thing is that there are many ways to adjust the amount you have to pay, which is why we advise you to put your trust in our tax experts.

At Meridional, we’d be delighted to help you with your taxes in Spain.

CONTACT US HERE