Spanish Taxation on Residents and Non-Residents
IRPF Direct Tax for residents – Modelo 100 IRPF
The Personal Income Tax (Impuesto sobre la renta de las personas físicas/IRPF) is a direct tax levied on the income of individuals on the same calendar year; You might deduct the taxes paid at source in another country, depending on the Double Taxation Treaty.
Within the IRPF, Modelo 100, you must report your worldwide income; you don’t have to file a Spanish tax return if your income from all sources is less than €8,000 and you have less than €1,600 of bank interest or investment income. Furthermore, the same applies if your rental income is less than €1,000 or you earn less than €22,000 as an employee or if you have more than one payer within the same year and your last employer paid you less than 1,500€ during the year.
If you are self-employ (Autónomos) your taxable income is determined as the difference between the income and the expenses; you must also report pensions and foreign pension, annuities, rents, interests, dividends and any capital gain you might have all over the world.
You must file the income tax return in Spain, from the first week of April to June 30th,
Since a few years ago, the AEAT (Tax Authorities) prepares a draft (borrador) for you as taxpayer that you can download from their website which normally include everything you have earned in Spain and the correspondent withholdings. It is usually available during the first week of April. You simply can accept, on line, your draft or modified any figure that you think is incorrect in order to file your Tax Return.
Taxpayers who have their habitual residence in Spanish territory are considered fiscal residents of Spain for tax porpoises, even if they have not obtained their residence permit.
If you are living and working in Spain, you will be liable to pay taxes in Spain on your income and assets and will need to file a Spanish tax return. Whether you pay Spanish taxes on your worldwide income, or Spanish-based income only, depends on your residency status.
It will be understood that the taxpayer has his habitual residence in Spanish territory, so he will be fiscal resident of Spain, when any of the following circumstances occur:
- That it remains more than 183 days, during the calendar year, in Spanish territory. To determine this period of stay in Spanish territory sporadic absences will be computed, unless the taxpayer proves his fiscal residence in another country.
- That in Spain lies the main core or the basis of its activities or economic interests, directly or indirectly. It shall be presumed, unless proof to the contrary, that the taxpayer has his habitual residence in Spanish territory when, in accordance with the above criteria, the spouse is legally not legally separated and the minor children who depend on it.
Spanish taxes for non-residents. Modelo 210
If you are a non-fiscal resident you only have to pay taxes over your Spanish source income. The general flat income tax rate for non-residents is 24% and 19%, if you are a citizen of an EU/EEA state.
Other income is subject to Spanish non-resident taxes as follows:
- Capital gains resulting from transferred assets are taxed at a rate of 19%.
- Investment interest and dividends are taxed at 19 percent, although are typically lower through double taxation agreements. Interest tax is exempt for EU citizens.
- Royalties are taxed at 24%.
- Pensionare taxed at progressive rates, from 8% to 40%.
If you a non-resident you should make your tax return on model 210.
Special Spanish tax for foreigners working on assignment
There is a special tax regime for foreignerscoming to work in Spain on an employment contract with a Spanish company. This is sometimes known as ‘Beckham’s Law’ as it was allegedly set up so that footballer David Beckham did not have to pay tax on his worldwide image rights when he came to play for Real Madrid in 2003.
Under the regime, you are only taxed in Spain on Spanish income at a rate of 24% up to €600,000 (2015 and 2016). For more than €600,000, in 2016 the tax rate was decreased from 47% to 45%. There’s no capital gains tax payable on interest outside of Spain.
If you are a Spanish tax resident (spending more than 183 days a year in Spain) and have not been resident in Spain in the last 10 years, you can apply to be taxed under this regime within six months of arriving in Spain. You can get reduced taxation for up to five years. Then you must file modelo 150, to apply use model 149
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