A couple doing their Spain taxes together

Getting to grips with the Spanish tax system should be high on your priorities. Even if you don’t work in Spain, there are still Spain taxes that may impact you as an Expat living in Spain. We’ll look at income tax, social security, inheritance tax, VAT (or IVA), property taxes, and wealth tax in Spain. We’ll also explore the exciting new Spanish tax system for entrepreneurs, remote workers, and digital nomads.

Spanish Tax System Overview

Spain collects tax at a national, regional, and local level. Each level of government covers specific economic activity areas to collect revenue.

The Agencia Espaรฑola de Administraciรณn Tributaria (AEAT) administers national taxes.

Spanish Tax System Year and Calendar

The Spanish tax year follows the calendar, so your assessment is from 1 January – 31 December each year. These dates are the same for individual and corporate tax assessments.

Key Spain Tax Dates – Filings

  • Modelo 720 (Global Assets) filing – 31 March
  • Income tax return filings open in mid-April.
  • Income tax return filings close on 30 June.

Key Spain Tax Dates – Payments

  • First or full income tax payment: 30 June.
  • Second income tax payment (if installments authorized): 30 October.

Becoming a Tax Resident in Spain

The Spanish tax system classifies you as either a resident or a non-resident. This classification significantly impacts the taxes you are liable to pay in Spain. The two taxes impacted are income tax and wealth tax.

The Spanish government will generally consider you as a resident for taxation (a fiscal resident) if:

  • You spend more than 183 days in a calendar year in Spain. This time includes temporary departures from Spain (like a weekend away).

Or

  • Spain is your main base or center of economic activity. The government could decide you are a resident if:
    • Your spouse and children live in Spain.
    • You have a home, investments, or business in Spain.
    • You work for a company in Spain.

Note: If you become a tax resident in Spain, you are taxable for the full calendar year, not just part of the year. With tax deductibility under dual tax relief, you wonโ€™t pay tax on this income in your previous tax residence country. There is an exception: if you have Beckham Law tax status (for example, under the Digital Nomad Visa), your year will be split as you are effectively taxed as a non-resident.

Can You Avoid Spanish Tax Residency?

Yes, but only in very specific circumstances. The 183-day rule is almost always dominant and takes precedence. So, don’t get your hopes too high.

However, if you can get a tax resident certificate from a country that has a tax treaty with Spain, you may be able to argue the case. You’ll need to have strong links with another country to have them issue your residency certificate. However, the certificate is only valid for one year; you’ll need to renew it annually.

Note: The Spanish tax authority won’t automatically accept any certificate and look to the 183-day rule first. USA, UK, and EU certificates are more easily accepted. Other certificates may be questioned more closely.

See Appendix 1 for Spain Double Tax Treaty (DTT) Countries

Need Tax Advice?

Need clarity on your tax obligations and a solid financial strategy ? Schedule a consultation with our recommended tax advisor, Louis, to gain complete clarity and peace of mind.

Income Tax in Spain – Impuesto De Renta Sobre Las Personas Fisicas (IRPF)

Also Read: Our Complete Guide to Personal Income Tax in Spain – La Renta and IRFP

Your taxable income and income tax rates depend on three things:

  1. Where you are a resident for taxation.
  2. Your global income.
  3. Where you live in Spain, tax rates differ between regions. Income tax rates are made up of two parts. 50% is a national tax with Spain-wide rates set by the Spanish government. The other 50% is a regional income tax, with rates set by each of the 17 autonomous regions. Regions like Andalusia and Catalonia have higher income tax rates than, for example, Madrid.

Non-Residents Income Tax (NRIT)

Fiscal non-residents only pay tax on specific income. This can include income from their own Spanish properties and some income generated in Spain.

The non-resident income tax rate is a flat rate:

  • 19% (EU or EEA citizens)
  • 24% (non-EU/EEA citizens)

You are unlikely to be able to claim any deductions on this income.

Capital gains and dividends are taxed at 19%, regardless of your citizenship.

Spanish Resident Personal Income Tax (IRPF)

Important: If you are a Spanish fiscal resident, you will pay Spanish tax on your global income. So, money earned in Spain or any other country is all added together. Your tax return is called la renta.

Remember, your region sets the tax rate of 50% of your overall income tax liability. So, you need to know your regional income tax rate to calculate what you owe correctly.

The national Spain income tax rates for 2024 are:

FromToPercentage
12,45019%
12,45120,20024%
20,20135,20030%
35,20160,00037%
60,001300,00045%
300,000Plus47%
Spanish Resident Personal Income Tax (IRPF) Rates Table 2024

Note: As a fiscal resident, there are many deductions you can claim depending on your circumstances. A good Spanish Tax advisor will help you identify what you can declare.

The Beckham Law

The Beckham law can be an excellent option for many Expats paying taxes in Spain.

If you have moved to Spain to work, you could pay lower tax rates for up to six years.

Important: You must apply within six months of starting your employment.

  • If you qualify, you’ll pay a flat 24% tax on your annual income up to โ‚ฌ600,000. Income over โ‚ฌ600,000 is taxed at 45%.
  • Spain will only tax you for income earned in Spain.

Note: If you have lived in Spain in the prior ten years, you may not qualify for the Beckham Law.

US Expat Taxes

Note: All US citizens must file an annual US tax return. This doesn’t mean you’ll pay double tax if you pay tax in Spain. Spain and the USA have a double tax treaty (DTT). This can be a concern for Americans moving to Spain from the USA, but it can be managed.

Check out this article on US Expat Taxes that covers this topic in detail.

Spanish Startup Law Tax System

The Spanish tax system had a significant update in 2022. This law change has awesome tax opportunities for startups, digital nomads, and remote workers. Even better, you may be able to defer your first two years’ tax.

Spanish Startup Tax

If your company qualifies as a startup, you could pay just 15% corporate tax for up to four years.

Tax for Digital Nomads and Remote Workers in Spain

Holders of the Spanish Digital Nomad Visa could get an awesome tax break. Effectively, you are taxed as a non-resident. You’ll pay a flat rate of 24% income tax. And you’ll be exempt from the Spanish Wealth tax.

Spain Social Security

Most people working in Spain must register and pay into social security. These payments fund healthcare, unemployment, pensions, and other social programs. The system is managed by Tresorerรญa General de la Seguridad Social (TGSS).

Both employers (29.9%) and employees (6.35%) contribute payments. These rates can change depending on the contract type and the nature of the work.

The rates are different for self-employed people, with a general rate of 30.6%.

There are some possible exemptions that Expats can explore with their tax advisor.

Spain Wealth Tax – Impuesto De Patrimonio

Only Spanish tax residents are liable for this tax on your worldwide assets. Non-residents are only liable for tax on their Spanish assets. The value is as of 31 December each year.

The tax-free thresholds and tax rates vary, depending on the region where you are resident. If you are a non-tax resident, you’ll pay the national level, regardless of where you live in Spain.

Like most of the Spanish tax system, the wealth tax is progressive. This means the more assets you own, the more tax you’ll pay.

Spain Wealth Tax Percentages

Spain’s Wealth tax is only payable on assets over โ‚ฌ700,000 (โ‚ฌ500,000 in Cataluรฑa and โ‚ฌ600,000 in Valencia).

The Madrid and Andalusia regions give you a 100% rebate on this tax – you’ll pay zero if you live in these regions.

The standard national rate is from 0.2% on assets up to โ‚ฌ167,129 to 2.5% over โ‚ฌ10,695,996 of eligible net asset value.

Regions with different thresholds or percentages include:

  • Asturias
  • Baleares
  • Cantabria
  • Cataluรฑa
  • Extremadura
  • Regiรณn de Murcia

A Modelo 720 is used to declare your non-Spanish assets.

The 60% Rule

The total of your wealth tax and income tax together can be at most 60% of your taxable income. The exception is if your final wealth tax bill is less than 20% of the original wealth tax.

Examples of Assets Included in the Wealth Tax Calculation:

  • Real Estate & Property
  • Savings
  • Investments
  • Luxury items (jewelry, boats, cars, art, etc.)

Examples of Assets Excluded From the Wealth Tax Calculation:

  • Your home (up to โ‚ฌ300,000)
  • Household furnishings
  • Spanish Historical Heritage Assets
  • Pension rights

Value Added Tax (VAT) in Spain – Impuesto Sobre El Valor Aรฑadido (IVA)

Spain’s consumption tax is added to most retail sales and professional services. The Canary Islands, Ceuta, and Melilla don’t have IVA; IGIC is their consumption tax.

IVA is generally itemized on any receipt, invoice, or bill.

  • IVA is 21% across the country on many items, including clothing, cars, fuel, appliances, alcohol, and utilities.
  • There’s a reduced 10% IVA on some items, including hotels and restaurants, leisure activities, glasses, concerts, and property purchases of new builds.
  • And finally, there is 4% IVA on essential foodstuffs, medicines, school supplies, and books.

Some professional services (including medical, dental, insurance, and education) are IVA-free.

Spanish Inheritance and Gift Tax

You may need to pay inheritance tax if you inherit assets as a Spanish tax resident. It is a progressive tax starting at 7% and going up to 34% – but this does vary in some regions.

Spanish Property Taxes

Owning a property in Spain means you’ll pay property taxes. The tax is usually payable in the last quarter of the year.

Property Ownership Tax – Impuesto Sobre Bienes Inmuebles (IBI)

This is a local tax levied by the Town Hall where your property is located. The amount you pay is calculated using your property’s official value, called the valor catastral.

 This tax is payable by resident and non-resident owners alike.

The exact amount varies by municipality. Most are in the range of 04% – 1.1% of the rateable value or valor catastral.

Note: Buying and selling property attracts different taxes (including capital gains tax). Please see our Guide to Buying & Selling Property in Spain.

Refuse Collection – Exacciones Municipales

Municipalities also collect small levies for garbage collection, street maintenance, etc.

Spanish Capital Gains Tax – impuesto sobre plusvalรญas

You may need to pay capital gains tax on profits from the sale of assets. And this can include the sale of real estate, including your home. There is an exception (main home exemption) if you reinvest the sale proceeds of a home into a new primary residence.

While both residents and non-residents pay capital gains tax, the rates differ.

The Spanish Capital Gains tax rate for 2024 is progressive:

FromToPercentage
06,00019%
6,00150,00021%
50,001200,00023%
200,001300,00027%
300,001Upwards28%
Spanish Capital Gains Tax Rate 2024 Table

Note: You only pay tax on the profit you make on the transaction. So, here’s a property transaction example.

  • House purchase price: โ‚ฌ200,000 (including taxes, fees, etc.).
  • House sale price: โ‚ฌ300,000 (after real estate agent fees, etc.).

Profit: โ‚ฌ100,000 – This is the amount that attracts capital gains tax.

The easy way to manage Spanish Tax as an Expat

We really struggled to get our heads around our Spanish tax obligations when we arrived. There was a lot of conflicting advice, and we narrowly avoided a significant penalty in our second year here.

What changed? We found a Spanish tax expert who specializes in Expat taxes. There are many fantastic tax specialists in Spain, but Louis, our advisor, has four essential qualities.

  1. Louis is an experienced Spanish tax law expert.
  2. His practice specializes in Spanish Tax for Expats, mainly from the USA and the UK.
  3. Louis and his team speak fluent English.
  4. The firm is focused on giving you clear advice and proactive support.

You can book a consultation here to see if Louis would be a good fit for helping you navigate the Spanish tax system.

Spanish Tax System – FAQ

Do Foreigners Pay Tax in Spain?

Yes, if you are a fiscal resident in Spain. You will normally qualify if you spend more than 183 days a year in Spain. You may also pay tax on Spanish income and property even as a non-resident. This includes EU/EEA citizens resident in Spain.

Does Spain have double taxation?

Spain has double taxation treaties (DTT) with nearly 100 countries, including the USA and UK. Citizens of those countries won’t pay double taxation.

What is the Beckham Law in Spain?

The Beckham law gives foreigners a significant tax break if they move to Spain for work.

Do non-residents pay taxes in Spain?

Yes, you may pay tax on Spanish income and property you own in Spain.

Appendix 1 – Countries That Have Double Taxation Treaties With Spain

See the Agencia Tributaria website for tax treaty details.

  • Albania
  • Germany
  • Andorra
  • Saudi Arabia
  • Algeria
  • Argentina
  • Austria
  • Australia
  • Armenia
  • Azerbaijan
  • Belarus
  • Barbados
  • Belgium
  • Bolivia
  • Bosnia and Herzegovina
  • Brazil
  • Bulgaria
  • Cape Verde
  • Canada
  • Qatar
  • Czech Republic
  • Chile
  • China
  • Cyprus
  • Colombia
  • South Korea
  • Costa Rica
  • Croatia
  • Cuba
  • Denmark
  • Ecuador
  • Egypt
  • United Arab Emirates
  • Slovakia
  • Slovenia
  • United States
  • Estonia
  • Philippines
  • Finland
  • France
  • Georgia
  • Greece
  • Netherlands
  • Hungary
  • India
  • Indonesia
  • Iran
  • Ireland
  • Iceland
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Kazakhstan
  • Kuwait
  • Latvia
  • Lithuania
  • Luxembourg
  • Macedonia
  • Malaysia
  • Malta
  • Morocco
  • Mexico
  • Moldova
  • Nigeria
  • Norway
  • New Zealand
  • Oman
  • Pakistan
  • Panama
  • Poland
  • Portugal
  • United Kingdom
  • Dominican Republic
  • Romania
  • Russian Federation
  • El Salvador
  • Senegal
  • Serbia
  • Singapore
  • South Africa
  • Sweden
  • Switzerland
  • Thailand
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • States of the former Soviet Union (except Russia)
  • Uruguay
  • Uzbekistan
  • Venezuela
  • Vietnam

15 Comments

  1. Thank you both for the complete information to retire in Europe, especially in Spain.
    Cassie from Dallas TX

  2. Hi,

    Thanks for the great web site!

    I have a couple of quick questions on taxation in Spain. Is it correct to say that if I live in Spain for less than 183 days in a calendar year, I have no obligations whatsoever as far as taxes in Spain? I am a US citizen and planning to get a long term visa (D visa, I believe). They may give visa for a year, but if I stay less than 183 days, can I completely avoid tax hassles in Spain?

    On a related note, if I get a one year visa to Spain, is it the visa’s expectation/requirement that I stay in Spain for the full year? I guess not, but just wanted to confirm. Do I need to show leased accommodation for the whole year if I am applying for one year visa?

    Thank you for any help!!

    1. Hi Kishore. If you spend less than 183 days in Spain in a tax year (and Spain is not your main base or center of economic activity), you don’t have to submit a tax return in Spain or pay income on tax earned outside of Spain. Your visa may have a minimum stay requirement (for example, the non-lucrative visa has a minimum residency requirement of 183 days per year). Not all visa and residence permits require proof of accomadation – you should contact our immigration lawyer partner to select the best option. All the best, Alastair

  3. Hi,

    I’ve been living in Spain since 2004 (originally from the UK). I will be moving to work in Saudi Arabia for the next two years. Whats taxes apply for me in spain if my tax residency is not in Spain?What are the limits I could transfer money to my Spanish accounts?

    1. Hi Bethany – I cannot give specific tax advice as I am not a qualified advisor and don’t have all your details, but I can provide some general principles. A UK citizen tax resident in Saudi Arabia would have no tax obligations in Spain outside of income or assets in Spain. There is no general limit on transferring money into Spain, but some transfers may be flagged for investigation by Spain’s tax and anti-money laundering services. Please see our article on transferring money to Spain for the best ways to do this. All the best, Alastair

  4. First, thank you for a wonderful site and the information.

    However, I must admit, it i still confusing to me. My wife and I are thinking of relocating to Spain – we are retired. That being said, we are trying to figure out the tax (and other requirements). We see there is a link to a consult with a tax lawyer. But before we do that, we want to learn more so we don’t waste any of the 30 minute consult time.

    Do you have a recommendation as to a site we can look at to try to understand the tax situation more? For instance, we area still confused about the wealth tax, what is and is not taxable with regards to pensions and retirement accounts, and just about everything else.

    Again, your site is great … and we are slowly going through the myriad of requirements. (We are hoping to make a move within the year.)

    1. Hi Greg – our articles are (we believe) as good as anything else out there. https://movingtospain.com/finances/tax/ Louis, our cross-border taxation expert, is very comfortable working with Expat retirees planning a move, and he will guide you through the process. All the best, Alastair

  5. Thank you for the details on Spanish taxes. I am semi-retired in the US, with some income from part time consulting. I would probably give that up if relocating to Spain, with US social security and other passive income qualifying for the non-lucrative visa. But the wealth tax appears to be a total deal-breaker for me, if I understand it correctly. If living in Spain for more than 183 days as a resident tax payer, I would be subject to the wealth tax on global assets. I don’t receive a “pension”, I have my own retirement investment accounts accumulated from 40 years of employment. Those assets, along with US real estate, would appear to be cost me heavily in Spanish wealth tax, presenting a financial disincentive to move. Am I right?

  6. Hi,
    Thanks for the great site, I have a question regarding Capital Gains tax,
    My wife and I are planning to move from the USA on a non lucrative visa, we plan on selling our property here in the USA, we are both in our 70โ€™s, how can we avoid paying Capital Gains taxes on the sale of our property?
    Thanks
    Les

    1. Hi Les – I can’t give specific advice as I am not a qualified tax advisor. However, if you sold your house while still a tax resident of the US, for example, you’d pay capital gains in the US, not in Spain. Speaking with financial planners or tax specialists (https://movingtospain.com/services/) is your best option here. All the best, Alastair

  7. Hi,

    If I come to Spain and use Beckhams law, Ill be on a DNV, will I have to pay tax in Spain on my UK property rental and if so do you have a breakdown of what this will be? In the UK I have to pay tax on all rental earnings only deducting the mortgage interest rate.
    Thank you
    Sarah

  8. We just had our tax consultation with Louis. It was one hour very well spent, taking our basic income and assets info and creating estimated tax scenarios for us. He is very familiar with Spanish taxes and how they would apply to a US expat. He answered all our questions and explained how the wealth tax would apply, as well as the current situation in Spain with regard to regional wealth tax exemptions. I highly recommend a 30-minute or 60-minute virtual meeting with Louis if you are considering a move to Spain and have questions or concerns about taxes.

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