Which taxes must pay a 'fiscal resident' and non 'fiscal resident' in Spain

22 | 07 | 2019

 When you arrive to Spain you appreciate to have your tax obligations clear. 


At Finques Feliu we strongly believe that honest coperation with other firms represents and extra for our client. On this occasion for: German, French and Dutch When you arrive in a state, you appreciate someone explaining your tax obligations to you.  we have the generous collaboration of @eliteinmobiliaria company based in Malaga.

Are you an expatriate? We can help you. First of all we must clarify that in tax terms the word 'foreigner' is not applied to your 'fiscal situation'. Thus, the correct thing is to speak of 'fiscal resident', if you live more than 183 days in Spain. On the contrary, if you do not exceed half a year, you are NOT a fiscal resident. In this sense, a Spaniard can also be a non-tax resident. To avoid confusions  the words 'foreigner' and 'national' had been erased.

 To get into the matter we put the link of the Treasury with the requirements that it establishes to consider you a resident.

Are you from a State of the European Union? We give you the link to Royal Decree 240/2007 on: 'Entry, free movement and residence in Spain of citizens of the Member States of the European Union and of other States party to the Agreement on the European Economic Area'.

Let us explain the regulation of residence permits. Keep in mind that your tax obligations stem from whether you are a natural or legal person and resident or non-resident tax resident. The first thing is to be clear about what international law establishes. Namely, all States have the power to determine: the requirements for obtaining residence permits, what types are the same and the national laws that govern them.

How do you obtain residence autoritsation?  In the case of Spain, there are two types of residence permits: 

1. Temporary: 

- Valid between ninety (90) days and five (5) years. The requirements for this permit are: to have means of living to meet their living expenses and stay, including, where appropriate, those of your family, for the period of time for which you request, without the need to engage in gainful activity. 

2. Permanent:

- Valid for those who have resided legally and continuously in Spanish territory for five (5) years. the departures to are discounted from the minimum period of 5 years, :

a) Absences due to holiday periods.
b) Absences of up to six months, provided that when added together they do not exceed a total of one year.
c) Absences, duly justified, made for family or health care reasons.

Now we explain your tax obligations. 

1. Previous questions:

1.1 Extension of the Spanish fiscal year: from January to December.

1.2 Payment periods: between May 1st and June 30th of next year. In Spain we always present, in the current year, the taxes of the previous year. 

1.3 It is necessary to be identified: whether you are a resident or not, to pay your taxes you need to have an NIE number.

2. Taxes for individuals of non-Spanish nationality with tax residence in Spain:

Remember: you must contribute to maintaining public services, from which, you can also benefit.  With this goal you are subject to the same taxes (VAT, Companies, Real Estate Taxes, etc.). What changes and, we explain below, are certain facilities for citizens from another State.   

2.1 Personal income tax: paid in the same way as a tax resident if you have been in Spain for more than 183 days. 

2.2 Special regime for impatriates popularly known as the 'Beckham Law';

'Individuals who acquire their tax residence in Spain may choose to pay non-resident income tax (IRNR), during the tax period in which the change of residence takes place and during the following five tax periods'. What are the requirements to benefit from it? gabinetegestor explains it in detail.    

2.3 Contribution to the general social security system:  

Spain has to manage and support the Welfare State.

3. Taxes for foreign individuals without tax residence in Spain:

3.1 Personal income tax:

This is explained to us by the Treasury with its most recent regulation, that is to say, Royal Decree 5/2004. You will only pay for the income you have generated as a worker in Spain and you will do so at a fixed rate of 25% on the gross income. 

3.2 Forms to pay various taxes:

Value Added Tax (VAT), Inheritance and Gift Tax (ISD), Transfer Tax (ITP), and Documentary Legal Acts (AJD).  Here you have the corresponding link that groups all the information you can click and the necessary models will be displayed.

3.3 Dividends and other income derived from participation in an entity's own funds, interest and other obtention for the transfer to third parties of own capital and capital gains arising from the transfer of 19% taxable items in 2019. 

3.4 A special case: obtaining nationality thanks to the 'Golden Visa'.

Spain gives passports to foreigners in exchange for the investments we will list: do you write down the requirements to receive the 'Golden Visa'?  

    Invest a minimum of 500,000 € in:

    housing free of charge. Here Feliu helps you to acquire a dream house  

    An initial capital investment of €1 million or more:

 - Bank deposits in Spanish financial institutions.
  - Investment funds.
  - Shares or participations in Spanish capital companies with real business activity.

Two million € in:

- Spanish public debt securities.

- A business project to be developed in Spain accredited like 'general interest'. At least one of the following conditions is required:
- Direct job creation.
- Carrying out an investment with a relevant socio-economic impact in the geographical area in which the activity is to be carried out.
 - Some relevant contribution to scientific and/or technological innovation.

to sum up:

1. As a tax resident from another State, the Spanish tax system is less complex - and less costly - for you. Even so, paying taxes is a civic duty (you are only exempt if you do not pay €22,000 per year). 

2. The 'border' between being a tax resident and not being a tax resident is: residing more than 183 days in Spain.

3. The 'Beckham Act': offers tax incentives to non-resident taxpayers

4. In Spain it is possible to obtain a passport with investments of more than €500,000 in Spanish territory.

We hope we helped you . However, don't hesitate to contact us.