If you are planning on relocating or buying a property in Spain, you may be faced with the decision of whether or not you want to be a non-resident in Spain. If so, there are several things that will need to be taken care of in advance.
This article explores what it means if a person is considered a non-resident taxpayer in Spain and how this affects their taxes. It also provides information about the various types of income that will have different tax rates applied.
What is a non-resident in Spain?
You are a non-resident if you live in the country for less than 182 days. For example, a tourist first will be a non-resident because they have a non-permanent aim in mind.
Even if you have a residency permit, such as a short-stay visa. You will still be considered as a non-resident when you are staying less than 182 days.
It is possible for a non-resident to own property, open a bank account, and get income from Spain. This does not make them a resident in Spain.
People visiting in Spain will automatically be deemed non-resident taxpayers the day they arrive in the country. This is important to note, as it can have a direct bearing on how much you will be taxed for certain instances such as real estate purchases and inheritance.
Get taxes done more quickly and efficiently with our tax services in Spain
Tax in Spain for non-resident ex-pats
There are two types of taxes in Spain that will need to be paid by those who are staying in Spain as non-resident. These are income earned from work or from passive income, such as income from a rental property for example.
In terms of the first category, the rates may vary depending on how much you earn and whether you have Spanish residency.
Some of the advantages of living in Spain as a non-resident:
- There is no inheritance tax in Spain for non-residents. This also applies to properties that were purchased before moving abroad.
- You do not have to pay social security contributions to the state, though this does not apply if you are self-employed and just want to buy private health care.
- The only tax that you will need to pay will be on any property that is owned in Spain. If you do not reside in the country, this can be quite low and means that there is no increase in property taxes each year.
- If you leave your primary residence empty for two years or more, you will not be charged any taxes on it. However, you must keep the property up to date in terms of maintenance and renovations.
- If an individual is under 65 years old and has resided abroad for more than 10 years (or is over 65), they are able to claim Spanish residency, which will provide them with a number of benefits.
Non-resident tax in Spain
In general, non-resident taxpayers pay a rate of 24 per cent on income earned in Spanish territory or obtained from Spanish sources and a rate of 19% on capital gains and financial investment earnings derived from Spanish sources. Various other sorts of income are subject to different rates.
Non-resident individuals who are tax residents in a country/jurisdiction of the EU or of the EEA and have an effective exchange of tax information with that nation/territory are taxed at a rate of 19%.
Capital gains tax for non-residents in Spain
Non-residents from outside the European Union (EU) are required to pay a 24% fixed capital gains tax rate. However, if the nonresidents are from a European country, their capital gains tax is lowered to just 19%.
Compared to the capital gains for residents which is 19 per cent for the first €6,000 profit, 21 per cent for profit between €6,000 and €50,000, and 23 per cent for any profit above €50,000.
Jewellery, stocks, collectables, bonds, property, precious metals, lands are subject to capital gains tax.
Non-resident tax rates for income that is earned in Spain
Certain rules apply to those who are living outside of the country and earning an income through employment or other means. This includes dividends, rental property, etc.
Those who do not live in Spain but own properties within the country will be taxed under non-resident taxation
Spanish Wealth tax for non-residents
Non-residents who own properties in Spain will have to pay wealth tax. This holds true even if the property is not being used as a primary residence.
The wealth tax rate in Spain is between 0% and 3.5% depending on the region you are registerd in.
Frequently Asked questions on non tax residency
Below you can find some of the commonly asked questions on non-tax residency and their answers.
Who can help me file my tax return?
It is recommended that you work with a tax advisor if you are filing taxes in Spain for the first time or have any concerns about the process. As every country has its own rules and regulations regarding personal income, it can be quite confusing for non-residents to get an understanding of the process.
What are the tax consequences when choosing between being a resident and a non-resident taxpayer in Spain?
The main difference between these two types of taxpayers is that one will be taxed more heavily than the other. It usually depends on your status as a resident or a non-resident, though there are some exceptions to this rule.
What is the tax year in Spain?
Residents of Spain pay taxes on a calendar-year basis, with January 1 to December 31 as the tax year. Between April 6 and June 30 of the following year, eligible residents must submit tax forms to the Agencia Tributaria. In Spain, there are no further extensions to filing income tax returns.
What do I need to pay taxes in Spain?
What happens if I don’t pay my taxes on time?
The Agencia Tributaria will charge late payment interest to those who do not file their income tax returns by the given deadline. There is also a penalty of up to 10% for those who fail to make any payment within two months after the due date for filing your return.
How much is the capital gains tax for non-residents in Spain?
Non residents pay 19% on capital gains and financial investment earnings derived from Spanish sources.
When do i have to pay income tax in Spain?
The deadline for submitting the Spanish income tax returns to the Agencia Tributaria is between April 6 and June 30 of the following year. There are no further extensions.
Do I have to pay wealth tax in Spain as a non-resident?
No, wealth tax is only applicable to those who are residents of Spain.
Do I have to pay tax on my rental income as a non-resident?
Non-residents are required to pay a tax of 24.75% on rental income. You cannot reduce 50% as in the case of resident owners. If you are a resident, you must include your rental income with your other income when making your annual Spanish tax return.
Do I have to pay Spanish social security while living abroad?
Only if you live in Spain for 183 days or more then you will be subject to Spanish social security laws.
Are pensions paid by Spanish social security to non-Spanish residents who do not have an agreement with the country taxable?
Non-resident individuals that retire in Spain and who receive retirement pensions or other types of pensions are subject to non-resident income tax.
Do I need to pay taxes on my worldwide income as a non-resident in Spain
No, you are only required to pay taxes on income earned in Spain.
Which income tax form do I need to declare as a non-resident?
It is necessary to submit Form 210.
A word from SpainDesk
In this article, we have discussed the non-resident tax in Spain. If you would like to have professional tax advice, contact us at firstname.lastname@example.org and get more information on how we can help you.
Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.
Get taxes done more quickly and efficiently with our tax services in Spain