Guide to Spanish taxes for expats

Spain Taxation for Expats: What You Need to Know

Moving to Spain changes your tax situation. This guide explains how the Spanish tax system works, when you become a tax resident, which taxes you will pay and how to avoid paying twice — and our tax team can handle it all for you.

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Introduction

Your tax situation depends on your residency

The most important question for any expat is whether you are a Spanish tax resident. Residents pay tax on their worldwide income; non-residents only pay tax on their income from Spanish sources.

Tax residents

You pay Spanish income tax on your worldwide income, with double tax treaties to avoid paying twice.

Non-residents

You only pay tax on income from Spain, such as rent from a property or Spanish investments.

New residents and digital nomads

You may be able to opt for the Beckham Law and pay a flat 24% on your employment income.

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Tax specialists for expatsYour taxes are handled by our tax advisors, fully in English.
Requirements

Key Spanish tax rules for expats

  • Tax residencyYou are usually a tax resident if you spend more than 183 days a year in Spain, if your main economic interests are here, or if your spouse and dependent children live here.
  • Worldwide incomeResidents declare their income from all countries; double tax treaties prevent paying twice on the same income.
  • Annual returnThe income tax return (Renta) is filed between April and 30 June for the previous calendar year.
  • Assets abroadResidents with assets abroad over €50,000 in a category must file the informative Modelo 720.
  • Regional differencesIncome tax, wealth tax and inheritance tax vary between autonomous communities.

Rates and allowances change every year and vary by region. We calculate your taxes using the rules of the region where you live.

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Spanish taxes explained

Understanding the Spanish tax system

Spain has three levels of taxation. National taxes, such as income tax (IRPF), VAT and corporate tax, are set by the central government. Regional taxes, such as part of income tax, wealth tax and inheritance and gift tax, are partly set by each autonomous community. Local taxes, such as the property tax (IBI), are set by the town hall.

The Spanish Tax Agency (Agencia Tributaria) enforces compliance, and penalties for late or incorrect returns can be significant — so it pays to get your obligations right from the start.

Types of taxes in Spain

Personal income tax (IRPF): a progressive tax on the worldwide income of residents and on the Spanish income of non-residents.

Wealth tax (Impuesto sobre el Patrimonio): a tax on net assets, with exemptions and bonuses that vary a lot by region. People with net wealth above €3 million may also pay the solidarity tax on large fortunes.

VAT (IVA): a consumption tax on most goods and services, generally 21%.

Property tax (IBI): an annual local tax paid by property owners, similar to council tax.

Capital gains: gains from selling property or investments are taxed as savings income, at rates from 19% to 30%.

Income tax rates

Income tax on work, pensions and business income is calculated with a combined state and regional scale. As a reference, the rates are 19% up to €12,450, 24% up to €20,200, 30% up to €35,200, 37% up to €60,000, 45% up to €300,000 and 47% above that. The top marginal rate goes from 45% in Madrid to over 50% in some regions.

Savings income — interest, dividends and capital gains — is taxed separately: 19% up to €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000 and 30% above that.

Your annual tax obligations

The Spanish tax year runs from 1 January to 31 December. Residents who meet certain income thresholds must file an annual income tax return, usually between early April and 30 June of the following year.

If you work in Spain, you will also contribute to Spanish Social Security, as an employee through your payroll or as a self-employed worker through your monthly contributions. Freelancers also file quarterly VAT and income tax returns.

Double taxation relief

Spain has double taxation treaties with most countries, including the United States, the United Kingdom, Canada and Australia. These treaties decide which country can tax each type of income and allow you to deduct tax already paid abroad, so the same income is not taxed twice.

Common challenges for expats

The most frequent problems we see are getting tax residency wrong in the year of the move, missing the Modelo 720 or the Beckham Law deadline, not knowing how foreign pensions or investments are taxed, and keeping up with rules that change every year. A tax advisor who knows both the Spanish system and the situation of expats can save you money and penalties.

Our service

How our tax team can help

We handle your Spanish taxes from your arrival, fully in English and online.

  • Tax residency analysis for the year you move.
  • Beckham Law eligibility check and application.
  • Annual income tax return (Renta or Modelo 151).
  • Modelo 720 for assets abroad.
  • Wealth tax and solidarity tax advice.
  • Tax on foreign pensions, investments and rental income.
  • Non-resident tax returns for property owners.
  • Quarterly returns for freelancers.
  • Double taxation planning with your home country.
How do we work

How we work: four simple steps

Tell us about your case

Tell us about your income, your assets and when you moved to Spain.

Evaluation

We explain your obligations and the options to pay less tax legally.

Filing

We prepare and file your returns with the Spanish Tax Agency.

Ongoing support

We remind you of every deadline and keep your documents in your client folder.

Prices

Our service

Full service

We handle your Spanish taxes

Personal quote

From your first tax return in Spain to your annual filings. Prefer to start with advice? Book a 1-hour consultation with our tax advisor for €120 (VAT incl.).

  • Tax residency analysis
  • Annual and quarterly returns
  • Beckham Law and Modelo 720
  • Double taxation planning
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FAQ

Taxes for expats in Spain: FAQ

Can't find your question? Ask us in a call — we'll look at your specific situation.

When do I become a Spanish tax resident?

Usually when you spend more than 183 days in Spain in a calendar year, when the centre of your economic interests is in Spain, or when your spouse and dependent children live here.

Do expats pay tax on income from abroad?

Spanish tax residents pay income tax on their worldwide income. Double taxation treaties usually let you deduct tax paid abroad so you don't pay twice.

What are the income tax rates in Spain?

As a reference, from 19% to 47% for work and pension income, depending on your income and region, and from 19% to 30% for savings income such as interest, dividends and capital gains.

When is the Spanish tax return filed?

The annual income tax campaign usually runs from early April to 30 June, for the income of the previous calendar year.

What is the Modelo 720?

An informative return in which tax residents declare their assets abroad — accounts, investments and property — when they exceed €50,000 in a category.

Do I have to pay wealth tax?

It depends on your net wealth and your region: each autonomous community has its own exemptions and bonuses. Very large fortunes may also pay the state solidarity tax.

Can I pay less tax as a new resident?

If you move to Spain to work, the Beckham Law may let you pay a flat 24% on your employment income for up to six years. We check if you qualify.

I don't live in Spain but own property here. Do I pay tax?

Yes. Non-residents pay tax on Spanish income such as rent, and on the imputed income of a property they don't rent out, besides the local property tax (IBI).

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