I f you work and reside in Spain or have economic interests in the country you must file your income tax return as resident or non-resident.
At Legaliaspain we can assist you with your:
Personal Income Tax (PIT) – Impuesto sobre la Renta de las Personas Físicas (IRPF)
Non-Resident Income Tax (NRIT) – Impuesto sobre la Renta de No Residentes (IRNR)
Foreign Assets Declaration (720 Form) – Declaración sobre bienes y derechos situados en el extranjero (Modelo 720)
Wealth Tax – Impuesto Sobre el Patrimonio (IP)
Tax planning for Spanish tax residents, non-residents and investors looking to carry out businesses in Spain
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Filing your income tax return in Spain
I ndividuals working and residing in Spain or having economic interests in Spain (in most of the cases by owning a property) are liable for filing an income tax return in Spain (IRPF) either as resident (PIT) or non-resident (NRIT).
Being a tax resident in Spain generally means that you must file tax on your worldwide income, no matter where the income is made, whereas a Spanish non-resident taxpayer shall be liable for paying tax on the earnings made in Spain.
Here are some of the differences:
Tax Residents in Spain
But, how is tax residency determined? Am I due to pay taxes if I live but I don’t work in Spain? What if I own a property in Spain but I reside overseas? How much time can I spend in Spain before becoming tax resident there?
Here are some questions and answers to personal income tax matters asked over time:
Income tax return in Spain IRPF
Am I liable for paying taxes in Spain?
Generally speaking, anyone living and working in Spain on a permanent basis is liable for paying tax in Spain – personal income tax (PIT) or declaración IRPF in Spanish- as a Spanish tax resident on their worldwide income.
On the other hand, anyone having economical interests in Spain (i.e. owning property) is liable for paying tax in Spain as a non-resident – non-resident income tax (NRIT).
How do I know if I am a tax resident in Spain?
The tax authorities consider that an individual has is tax residence in Spain when:
- Spend more than 183 days in Spain during a calendar year*.
- The core of its activity or economical interests is directly or indirectly located in Spain; or
- The spouse (not legally separated) and the underage children of the individual have their permanent address in Spain.
*temporary absences are added to the count unless a foreign tax residency can be proved.
Anyone not meeting the prior requirements shall be considered a non-resident taxpayer in Spain.
I spend time in Spain during the year but I don’t work there, can I be considered a Spanish tax resident?
If you are spending over 6 months in Spain or, in the case that you are not spending more than 183 days in Spain but the core of your activity or economical interests (directly or indirectly) is located in Spain, or your spouse and you children have their permanent residency there, the tax office will consider you tax residency to be in Spain and you will be due to file an income tax return or declaración IRPF in Spanish.
What is the tax rate for a Spanish tax resident?
Income in Spain is taxed depending on its source, being the main income sources employment income and capital gains.
The employment tax rate is calculated on a scale of several thresholds from 19% to 45%.
The capital gains tax rate is calculated on a smaller progressive scale from 19% to 23%.
What is the tax rate for a non-resident taxpayer?
Generally speaking, income obtained in Spain by non-resident taxpayers is tax at 19% for residents in an EU state member and 24% for non-EU countries.
I own property in Spain but I don’t live there, am I liable for paying income tax?
Yes, you are due to file an income tax return as a non-resident taxpayer for owning property in Spain (even if the property is void).
If the property you own is leased you must file an income tax return including the income made on the lease income.
In case the property is void filing and the income tax return is likewise mandatory paying a percentage (1.1% or 2%) on the total property value.
When is the income tax return due in Spain?
Filing your PIT (declaración IRPF) as a Spanish tax resident: From 1st April to 25th June.
Filing your NRIT as a non-resident taxpayer:
- Income obtained from selling a property: Within three months since the date of the sale.
- Income obtained from lease: On a quarterly basis.
- Income when due for owning a property: Any time during the calendar year.
What is the modelo 720 and in what cases must be filed?
The modelo 720 or declaración sobre bienes y derechos situados en el extranjero in Spanish is the form that Spanish tax residents are obliged to submit to the tax office informing on the assets (shares, bank accounts) or real estate owned in a foreign country.
This form is for information purposes only although serious fines apply for failing to file the form with the appropriate information.
What are the consequences of failing to file an income tax return?
In most cases a delay in filing an income tax return can cause a late filing penalty and interest charges. However, if the amount of the unpaid tax is over 120,000.-€ criminal tax violations can apply.
Filing your tax return in Spain with Legaliaspain
- English speaking tax advisors and solicitors available at your disposal at all times
- Flat fees for filing your income tax return (declaración IRPF) starting at 120.-€ + VAT
- Only registered professionals working in your tax return
- Complete assistance in other legal areas such as real estate, tax or litigation if needed throughout the process
- Over ten years experience advising foreign individuals and investors on income tax matters
What our customers say about us
The professionals at Legaliaspain were an excellent choice for us. They completed our case with the highest standards providing all the information we needed at every stage.
They were also willing to walk the extra mile helping us with those very important loose ends we did not bear in mind. We would definitely recommend them.