Becoming tax resident in Spain?

If you stay in Spain more than 183 days within the same calendar year, you are considered tax resident. The following year, you must file a tax return including your global income. The Spanish tax year is the calendar year.

Fiscal residents will have to submit their tax returns no later than the 30th of June for the previous calendar year.

The Spanish tax office doesn´t send the forms for filling out the income tax but from the Spanish State Tax website an application to fill out the tax return can be downloaded. Good Spanish skills are required to use the program.

After having filled in the income data, the tax is calculated through the tax program and the amount is paid at the bank, which also receives tax return. The bank, then, sends the tax return to the tax authorities. Alternatively, the tax return can be reported and paid electronically, if the taxpayer is in possession of a digital signature.

Income and assets are disclosed in two different tax returns.

The Wealth tax form should only be completed and submitted if your assets exceed € 700,000 after deductions.

The wealth tax was abolished in 2008, but is now temporarily reintroduced for the years 2011, 2012, 2013 and 2014, however, with the significantly higher capital limit of the 700,000 euro.

Spouses must submit wealth statements separately. They can not choose to be jointly taxed, as it is known from income tax, where you are entitled to do it.

The limit for paying wealth tax is € 700,000, in addition to an allowance of € 300,000 for the value of your primary residence. The portion of the assets coming from the primary residence must therefore only include the amount that exceeds € 300,000 for singles and € 600,000 for married couples. The value of the property included in the calculation should be the highest of the latest title deed value or the cadastral value. Any mortgage can be deducted in the calculation.

There are only allowance for the primary residence. Other properties are included in the statement of assets with the full equity.

The Income-tax return should, in most cases, be completed and submitted. The rules are:

All persons who receive foreign salary or pension income of € 11,200 or more are required to file a tax return.

Employees pay on account of withholding tax as it is known from most countries. If an employee has had only one employer during a calendar year and no special deductions, the employee is not required to file a tax return if income is below € 22,000.

Self-employed must always submit a tax return. In addition, they pay an interim tax every quarter, based on the quarterly tax and Vat reports. This interim tax amounts to 20% of net earnings.

Spouses can choose to be jointly taxed for optimizing their personal deduction.

You can get help with filling in the tax return from the tax authorities, or ask MW Services for help.

IBI (“Impuesto sobre Bienes Inmuebles”) is the Spanish term for the Real Estate tax. The tax is levied annually and is normally about 1% of the Cadastral Value (Valor Catastral). The tax rate are expected to increase in the coming years.

If you own more than one property, you must also pay an imputed tax on income from these properties. This is also calculated on the basis of the cadastral value.