Those who are living in the country and working will be required to pay taxes on their income and also will need to file a Spanish tax return. Whether you pay taxes on worldwide income or just Spanish based income this will determine on residency status. As a result of this it is advised before moving to check if your home country has tax treaties with the country and the EU. This makes sure that expats will not be double taxed.
Expats who are an official resident of Spain will need to pay Spanish tax on worldwide income which is calculated on a progressive scale.
Non-residents (If you have lived in Spain for less than 183 days) will only need to pay tax on their Spanish income which includes income on Spanish property. Tax will also be applied on property ownership, goods and services in Spain.
Generally, income tax will need to be paid for any year where an individual spends more than 183 days in Spain. After this time an individual becomes a Spanish tax resident who is liable to be taxed. As a resident you will be required to submit a tax return and pay income tax on your worldwide income if:
- You are self employed or run your own business
- Annual income is more than EUR 22,000
- You have capital gains and savings income of more than EUR 1,600 a year
- Is your first year declaring tax residenct
An NIE will be needed to be identified by the Spanish revenue services.
Dual Taxation Treaty
The country has signed treaties with many other countries which help expats to avoid double taxation, therefore you will not need to pay tax in your home country as well as in Spain. A list of the treaty countries can be found at the Spanish tax authority
Spanish Tax Return
In the first year of tax residency, those who have moved here will need to file a tax return. After one year, you will not be required to do this if your income from all sources is less than EUR 8,000 and you have less than EUR 1,600 of bank interest,
Information on how to make a declaration can be found on Modelo 100, here you will find guidance on how to complete and submit the return.