How do Spanish taxes work for non-residents?
Tax residents in Spain are classed as such if they live in Spain for more than 6 months a year, or their immediate family or primary economic interests are based in Spain. If you live in Spain for less than 183 days a year (around 6 months) then you won’t be considered a resident. However, even non-residents still have to pay tax on properties they own or any income they earn from employment in the country.
Somewhat confusingly, there are some state tax rules and some regional tax rules, meaning that tax regulations and rates can vary throughout different regions of Spain. Income-based taxes depend on your residency status, as tax residents must pay a percentage of their total global earnings, while non-residents only have to pay tax on earnings within Spain – even if they have income from other countries.
Taxes can be a complex issue, especially if you struggle to keep track of your finances or find information about tax relief options in Spain. We have experts in Spanish tax regulations on our team at Manzanares Lawyers, meaning we can help you get your finances under control, calculate the taxes you owe in Spain as a non-resident, and organise appropriate tax payments to prevent legal penalties.
Non-Resident Tax Rates in Spain
The standard rates for non-resident tax in Spain range from 19-24% for income, capital gains, investment interest and dividends, and royalties, though tax can range from 8-40% for pensions. Many countries have signed double taxation treaties with Spain to avoid people being taxed on the same income in both countries. Though Spanish residents can benefit from personal allowances or deductions, non-residents are rarely eligible, so the tax usually has to be paid in full.
There are also specific rules regarding rental income from letting out property you own in Spain. In many areas, you must register with the local authority and obtain a licence before renting out your property, in line with regional housing regulations. While the regular tax year runs from 1st January to 1st December in Spain, rental income tax must be paid quarterly, and it’s the property owner’s responsibility to manage taxes. This also means ensuring that any outstanding tax balances are paid off before renting or selling a property, or even gifting it to family or friends.
Even if you don’t rent out your second home in Spain, all property owners must pay a form of annual council tax to the local authority, known as IBI. This tax rate is based on the value of the property, with rates varying from 0.4-1.3% across different municipalities. Again, it’s your responsibility as the property owner to register with the appropriate authorities and make sure that your non-resident tax in Spain is paid on time – it’s possible to appoint a legal representative to handle these matters for you if you are unable to manage them yourself.
How to file non-resident tax returns in Spain
If you are classified as a non-resident in Spain, then you are obligated to fill out Form 210 to declare non-resident income (Impuesto de la renta de no residentes, declaración ordinaria – or IRNR for short).
When you purchase a property in Spain, you must have a foreigner ID number known as an NIE, so you should already be registered with the tax agency in Spain. You can submit your Spanish non-resident tax forms online or hire professionals like Manzanares Lawyers to do it on your behalf.
You will need to declare all your assets in Spain, as you may also be liable for the Spanish wealth tax if their value exceeds 700,000€. Though it may seem tedious, you must submit information for every property you own in Spain – and if the property has joint owners, each of you must file separately.
Even if you have no income in Spain, and do not rent out your property, you will still need to submit a non-resident Spanish tax declaration, as the property itself is still considered a taxable benefit. Rather than charging up to 24% on your earnings in Spain, tax will be charged on a percentage of the property’s cadastral value.
However, if you have no Spanish income, you can submit just one annual tax return – whereas those with rental income must submit a quarterly tax return reporting their earnings every 3 months. That said, EU residents can submit an annual return if they did not generate any income or made a loss.
The requirements will vary on a case-by-case basis, depending on factors such as your nationality, property value, and income status.
Documents you’ll need for Spanish non-resident tax:
In order to file a non-resident tax return in Spain smoothly, you will need to get it right the first time and supply all the relevant information at the time of submission.
The documents you will have to provide are likely to include:
- ⦿ The full address of your property in Spain.
- ⦿ Foreigner Identity Number (NIE) for each owner.
- ⦿ The date of purchase and price of the property.
- ⦿ The property’s cadastral value (valor catastral).
- ⦿ Your International Bank Account Number (IBAN).
- ⦿ Details of each owner (full name, nationality, date and place of birth, current primary address and country of residence, etc).
- ⦿ Evidence of any income earned within Spain.
If you rent out your Spanish property and earn rental income from this, you must supply information on the schedule of rental income for each quarter.
EU citizens can include documents evidencing expenditure such as mortgage interest, community charges, insurance, running costs, maintenance and repairs, or any other expenses that may be deducted before income tax is applied.
This may also require a Residence Certificate issued by your home country, proving that you are a tax resident in that country. This can help with proving your eligibility for deductions and/or avoiding double taxation.
Spanish Taxes for Non-Residents
At Manzanares Lawyers, we understand that this can be difficult if you aren’t in the country, so relying on specialist solicitors like us to be your representatives and handle your tax affairs could save you time, money, and worry. We can help you to submit your Spanish tax declarations and pay on time to avoid unwanted fines and debt.
Spanish taxes for non-residents can quickly become very complicated – especially if you aren’t a native. Manzanares Lawyers can give you clarity on exactly what you need to pay and when, applying our years of expertise in this area to ensure that you know exactly where you stand regarding Spanish property tax for non-residents.
We can assess your tax situation and give you an overview of your Spanish tax liabilities, making sure that you’re never in the difficult position of being unable to afford your tax payments, or missing them altogether and risking fines for non-payment. We’re here to make you feel more comfortable about your non-resident tax in Spain, with our friendly team of professional lawyers glad to offer assistance whenever you need us.
Please note that while we offer a variety of legal services throughout the whole of Spain, including conveyancing, fiscal advice is only offered in the region of Andalucía. We are unfortunately unable to provide tax advice outside this area. If you do live in Andalucía and require assistance with Spanish non-resident taxes, feel free to contact us.
Which non-resident taxes in Spain can you help with?
While the rules are different, non-residents must pay taxes in Spain on their income and assets, just as residents have to. The Spanish tax authorities can issue demands for payments dating back up to 4 years, so it’s important to stay on top of filing and paying non-resident tax in Spain. Here at Manzanares Lawyers, we can assist with a range of taxes that apply to both residents and non-residents in different circumstances. For non-resident taxes in Spain, we can help with the following:
⦿ Income Tax
Impuesto sobre la Renta de No Residentes (IRNR)
|While tax residents in Spain are taxed on their total worldwide income, non-tax residents are only taxed on earnings within Spain, such as rental income. Forms of income that fall under the umbrella of this tax include interest, dividends, royalties, capital gains, and pensions.
⦿ Property Tax
Impuesto Sobre Bienes Inmuebles (IBI)
|Whether you live in it or not, anyone who is registered as an owner of a property in Spain will be liable for the equivalent of a local council tax. As in other countries, the rates vary from one town hall to another, and the amount you pay depends on the property value.
⦿ Wealth Tax
Impuesto sobre el Patrimonio (IP)
On top of income tax, there is a separate tax that generally applies to individual net wealth of 700,000€ and above. Again, global net wealth is taxed for residents, while only the net wealth of assets in Spain is taxed for non-residents.
As of 2022, Andalucía has reduced the Wealth Tax rate to 0%, meaning neither residents nor non-residents will have to worry about this after filing and paying their tax return for 2021. However, a new ‘Solidarity’ Wealth Tax is being introduced in 2023–2024, which is likely to affect anyone who would have been liable for the standard Spanish Wealth Tax.
If you are a non-resident, or classified as a non-resident in Spain for tax purposes, you must still submit annual or quarterly tax returns as required for property, income, or other assets you hold in Spain. We understand that this can be inconvenient and complicated for people who don’t live in Spain or visit regularly, which is why Manzanares Lawyers provides tax management services in Spain to advise non-residents and act on their behalf.
Contact us for tax advice
If you believe that you could benefit from the expert guidance of Manzanares Lawyers on non-resident tax in Spain, then be sure to get in touch with us.
Our highly qualified teams are able to speak with customers in several different languages – including English, German, French, and Portuguese.
Please don’t feel as though a language barrier will hinder your understanding of our Spanish non-resident tax advice. We strive to communicate effectively with all of our clients, regardless of their nationality or language.
With over 20 years of experience, there isn’t a tax enquiry our company hasn’t dealt with before, so don’t hesitate to reach out if you need clarification or instructions on how to handle your tax payments in Spain.
Need help paying Non-Resident Tax in Spain?
We understand that fiscal management can be difficult for non-Spanish speakers who owe non-resident tax in Spain. From registering for your NIE (Foreigner’s Identity Number) when buying a property in Spain to completing your annual Modelo 100 forms and submitting them to the Spanish tax authorities on your behalf, we’re here to help you with your Spanish non-resident tax returns.
Whether you’re worried about paying too much or too little, you need help calculating your tax liabilities or would prefer to appoint a legal representative to handle the matter for you, the experts at Manzanares Lawyers are waiting for your call. We can assist with individual non-resident tax returns, including joint ownership tax declarations, plus taxes for non-resident business owners.
For professional assistance from tax lawyers in Spain, get in touch with us using the contact details above to discuss your needs. We’ll gladly provide guidance on preparation, submission, and payment of your Spanish non-resident taxes. If you plan on immigrating to Spain to become a full resident or intend to start a business, Manzanares Lawyers could also help with other aspects of tax planning.
For more information on paying non-resident tax in Spain, please read through our Frequently Asked Questions below, and get in touch with our team when you’re ready.
Non-Resident Tax Spain FAQs
Even if you live in Spain for part of the year, you’ll be classed as a non-resident taxpayer if your permanent address is not in Spain and you only live there for less than 183 days a year. If you stay in Spain for more than 183 days out of the year, then you’ll be considered a resident taxpayer.
Even when spending less than 183 days in Spain, you must apply for residency if you intend to stay in the country for more than 90 days at a time. If you don’t formally register for residency and spend more than 183 days in Spain, but for periods of less than 90 days, you would still become a resident.
If your primary interests and/or primary professional activities are in Spain, then the authorities will also consider you a resident taxpayer even if you don’t live in Spain for more than 183 days a year. For example, if dependent family members like your spouse and children live in Spain full-time, or if you are in employment or self-employment with a business in Spain even without residing there.
Anyone who owns a property in Spain must pay municipal property tax (IBI), and anyone who earns income in Spain must pay income tax on those earnings, including from employment or property rentals. Even if you don’t rent out your property and retain it for personal use, you’ll have to pay a small amount of tax based on its accumulated value (about 2% of the property’s rateable value).
If you sell a property or other assets in Spain, you’ll be liable for capital gains tax. Or, if you have assets located in Spain whose total worth exceeds a certain amount, you may have to pay a wealth tax (ranging from 0.2% to 3.75%). Inheritance tax is applicable if you’re a non-resident beneficiary of a deceased taxpayer’s estate, whether that person was a Spanish resident or non-resident.
The good news for EU citizens who own property in Spain is that you’re entitled to deduct relevant expenses from rental income, and therefore reduce your income tax. These can include things like letting agent and management fees, insurance, and maintenance costs. However, this depends on EU residency and not nationality – you must provide a Residency Certificate with the tax return.
The fiscal year can vary from country to country, but in Spain each tax year runs with the calendar year – from 1st January to 31st December. If you’ve purchased a property in Spain or conduct professional business in the country, whether employed by a Spanish company or self-employed, you’ll have a Foreigner’s Identity Card (NIE), which you must use to register with the tax authorities.
When you register with the Agencia Tributaria (the Spanish tax authority), you must submit a tax return form declaring your income no later than the following December. For example, you’d have until December 2022 at the very latest to declare your income for 2021, with the tax payment due by 31st December 2022. If you’re in employment, your income tax should be automatically deducted.
The IBI property tax for the previous year is usually due between May and August of the following year. If you rent out your property, it gets a little more complicated, as you’ll have to file quarterly tax returns rather than an annual one. These will be due on the 20th of the month in April, July, October, and January. In cases of joint ownership, each owner must file a separate tax return.
There are no extensions for tax payments in Spain, so if you miss the deadline and haven’t paid the taxes due, you’ll receive a fine in the form of progressively added interest. The tax authorities can charge up to 15% on top of the outstanding tax value if you don’t pay over the next year. If you struggle to manage manual taxes, it’s best to hire a Spanish tax solicitor like one of our team.
If you don’t submit tax returns at all to declare income or assets in Spain, the Agencia Tributaria will catch up with you and consider this active tax evasion. They will investigate you to look for evidence of fraud, leading to the freezing of your bank accounts, and the bank reclaiming mortgaged property. They can issue urgent tax payment demands for up to 4-5 previous years of outstanding taxes.
This can get expensive when it all piles up with added financial penalties, and you can’t dodge the Spanish authorities forever, so it’s not worth attempting not to pay. If you believe that you should have filed tax returns and paid taxes in Spain within the last 4-5 years, you can make retroactive Spanish tax declarations. The Agencia Tributaria may reduce the penalties following a voluntary declaration.
Even if you already declare and pay tax on your Spanish income and assets in your current country of residence, you must still submit tax returns in Spain. If your country has a double taxation treaty with Spain, you should be able to claim the Spanish tax back.
Unfortunately, if your country doesn’t have such a treaty in place, you will have to pay the tax twice, in both Spain and your resident country. The Agencia Tributaria maintains a list of countries that have dual taxation agreements with Spain, which currently includes the following countries:
- ⦿ Albania, Andorra, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan
- ⦿ Barbados, Belgium, Belarus, Bolivia, Bosnia and Herzegovina, Brazil, Bulgaria
- ⦿ Cape Verde, Canada, Czech Republic, Chile, China, Cyprus, Colombia, Costa Rica, Croatia, Cuba
- ⦿ Denmark, Dominican Republic
- ⦿ Ecuador, Egypt, El Salvador, Estonia
- ⦿ Finland, France
- ⦿ Georgia, Germany, Greece
- ⦿ Hungary
- ⦿ India, Indonesia, Iran, Ireland, Iceland, Israel, Italy
- ⦿ Jamaica, Japan
- ⦿ Kazakhstan, Kuwait
- ⦿ Latvia, Lithuania, Luxembourg
- ⦿ Macedonia, Malaysia, Malta, Morocco, Mexico, Moldova
- ⦿ New Zealand, Nigeria, Norway
- ⦿ Oman
- ⦿ Pakistan, Panama, Philippines, Poland, Portugal
- ⦿ Qatar
- ⦿ Romania, Russian Federation
- ⦿ Saudi Arabia, Senegal, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Sweden, Switzerland
- ⦿ Thailand, Trinidad and Tobago, Tunisia, Turkey
- ⦿ United Arab Emirates, United Kingdom, United States of America, Uruguay, Uzbekistan
- ⦿ Venezuela, Vietnam
States of the former Soviet Union not mentioned above won’t have double taxation exemptions.
Since the UK is no longer in the European Union, British nationals who own property or earn income in Spain will now be taxed as third-country citizens. This means that the UK is no longer eligible for previous exemptions in place for EU member states, so UK nationals are liable to pay the higher non-EU tax rates from 1st January 2021 onwards.
While British citizens previously had to pay the lower non-resident income tax of 19%, they now have to pay 24%. All EU citizen tax benefits, such as the ability to deduct expenses from rental income, no longer apply for owners of Spanish property who primarily live in the UK. Brexit does not affect the double taxation agreement between the UK and Spain.
The UK leaving the EU also means that British nationals will no longer benefit from freedom of movement between EU countries or the Schengen Area. As citizens of a third country, UK nationals must apply for a visa to visit Spain for longer than 90 days, and will have to apply for residency if they plan to stay in Spain for longer than this within any 180-day period.
The tax administration agency in Spain is the Agencia Estatal de Administración Tributaria or AEAT, more commonly known as the Agencia Tributaria. This agency is the tax authority in Spain, which is responsible for the management and collection of national taxes and customs, including:
- ⦿ Income Tax – Impuesto sobre la Renta de las Personas Físicas (IRPF)
- ⦿ Non-Resident Income Tax – Impuesto de la renta de no residentes, declaración ordinaria (IRNR)
- ⦿ Corporation Tax – Impuesto de Sociedades (IS)
- ⦿ Value Added Tax – Impuesto sobre el Valor Añadido (IVA)
Autonomous regions of Spain have the power to regulate their own municipal taxes within the framework of state tax systems, administering local taxes such as:
- ⦿ Municipal Property Tax – Impuesto sobre Bienes Inmuebles (IBI)
- ⦿ Wealth Tax – Impuesto sobre el Patrimonio (IP)
- ⦿ Inheritance Tax – Impuesto deSucesiones y Donaciones (ISD)
All Spanish residents and non-residents living and/or working in Spain must register with the tax authority and submit regular tax returns as required. Your tax liability may vary depending on the municipality and your country of origin, due to international tax treaties.
The Agencia Tributaria may carry out tax inspections at random or when triggered by ‘unusual’ financial activity, investigating whether individuals or companies have fulfilled their tax obligations accurately. As part of their tax assessments, the agency can issue demands for taxes owed from the previous four years, which is why it’s important to make accurate tax declarations on time.
Having Spanish solicitors who can speak English to liaise with the Spanish tax authority on your behalf can be very helpful if your ability to manage taxes is hindered by your lack of Spanish, so don’t hesitate to contact Manzanares Lawyers if you need our help with this.
There is a special tax regime available for foreigners working in Spain on assignment, the Special Regime for Displaced Workers (Régimen Especial para Trabajadores Desplazados). It is more commonly known as Beckham’s Law, because the famous footballer was one of the first to benefit from it when he joined the Real Madrid team in the early 2000s.
When someone becomes a tax resident in Spain while working in the country, their income is usually subject to Income Tax at progressive rates up to 48%. However, the special regime allows eligible expatriates the opportunity to pay taxes at a lower fixed rate for several years.
Instead of paying progressive tax rates on worldwide income, expats using the scheme will only be taxed at 24% on income within Spain up to 600,000€ for six years. They will effectively be considered a non-resident for Spanish tax purposes, which is beneficial for high earners.
To be eligible for the Special Regime for Displaced Workers a.k.a Beckham’s Law, you must:
- ⦿ Not have been living in Spain as a tax resident in the previous five years (reduced from the previous requirement of ten years).
- ⦿ Be moving to Spain after receiving an employment offer, transferring within an international company from a foreign country, or owning 25% or less of shares as a director of a company located in Spain.
- ⦿ Perform all employment responsibilities in Spain (anything performed abroad must be 15% or less of total working activity).
- ⦿ Apply for the regime within six months of moving to Spain.
- ⦿ Not receive income from permanent establishments in Spain (from Spanish businesses only).
Expats cannot apply for the scheme if they are self-employed or freelancers, unless they have a Digital Nomad Visa, or if they are a company director with more than 25% equity, unless they have a Start-Up/Entrepreneur Visa. Despite being commonly named after a footballer, professional athletes and sportspeople are no longer eligible for the regime.
Recent modifications to the regime also set the fixed rate for income over 600,000€ at 47%, and introduced a 3% tax rate on income over 200,000€ earned from interest, dividends, or capital gains. Depending on your income level and employment situation, this may not be the best route even if you are eligible, so you should take this into consideration before applying.
The NIE (Número de identidad de extranjero) is a tax identification number for foreigners carrying out financial activities in Spain. If you intend to work, study, or live in Spain, then you’ll need this number to conduct most kinds of day-to-day business – including:
- ⦿ Opening a bank account
- ⦿ Starting a job or course of study
- ⦿ Applying for a mortgage
- ⦿ Buying, renting, or selling a property
- ⦿ Buying or selling a vehicle
- ⦿ Getting a driving licence
- ⦿ Setting up a mobile phone contract
- ⦿ Connecting utilities
- ⦿ Registering as self-employed
- ⦿ Registering a business
- ⦿ Filing and paying taxes
Your NIE number will typically be nine digits, beginning with a letter followed by seven numbers then another letter – such as X1234567Y. Your NIE card will also include information such as your full legal name, gender, date of birth, nationality, and address, as well as the date of registration.
There are a few different ways to apply for a Spanish NIE number, but the primary options are to apply at the local immigration office if you’re already in Spain, or to apply at the Spanish embassy or consulate in your home country while you’re still living there. Successful applications should provide an NIE card in 2 weeks–1 month, as long as you’ve provided the right documentation.
To make things easier, you could assign power of attorney to a legal representative in Spain – such as Manzanares Lawyers – who can manage the application process on your behalf.
Regardless of being a Spanish tax resident or not, if a person passes away and leaves assets and property in Spain behind, their heirs must declare these as beneficiaries and pay any tax due according to regional Inheritance Tax rules (or state rules, if the region has no specifications).
The succession tax for inheritance and donations – Impuesto de Sucesiones y Donaciones (ISD) – can vary substantially at the regional level. It’s often best to claim Spanish Inheritance Tax allowances in the autonomous region where the assets are held, rather than following the national Civil Code.
For example, in Andalucía, where we provide tax management services at Manzanares Lawyers, the allowances are extremely favourable. Changes to the regional regulations in recent years mean that Spanish IHT only applies at a very low rate above a high threshold.
If the estate in Andalucía does not exceed 1,000,000€, then no ISD may be due at all for beneficiaries who are direct relatives (such as spouses or children). With up to a 99% reduction available on inheritances over 1m€, heirs could pay as little as 1% ISD in Andalucía.
Allowances and deductions depend on the inheritor’s relation to the deceased estate owner and the nature of the individual assets. As with any non-resident tax in Spain, it’s always a good idea to get advice from local experts, such as Manzanares Abogados.
While the Impuesto sobre el Patrimonio (IP) has been abolished in Madrid and Andalucía as of 2023, individuals who own assets exceeding 700,000€ elsewhere in Spain will still have to pay the wealth tax as non-residents.
However, the Impuesto Solidario a las Grandes Fortunas (Solidarity Tax on Great Fortunes) applies throughout all of Spain. This means that even non-residents whose assets are located solely in Madrid or Andalucía must pay this tax if their net worth exceeds 3,000,000€.
Some deductions and exemptions may be available, depending on the region and the nature of the assets. For example, some antiques, art objects, or historical heritage assets may be given a state exemption, but this is typically calculated on a case-by-case basis.
This temporary tax was introduced for the 2023 tax year, after which it will be reviewed for further legislation. Read our blog on non-residents paying wealth tax in Spain for more information about the standard tax and the Solidarity Wealth Tax.
Spanish tax residents have to pay taxes on their worldwide income and assets, but they’re also entitled to a range of personal allowances that offer tax relief.
These annual Spanish tax allowances include:
- ⦿ Tax-free income allowance (dependent on age)
- ⦿ Marriage allowance (when filing joint tax returns as a married couple)
- ⦿ Child allowance (for up to 4 children under 25 years old living with the taxpayer)
- ⦿ Dependent relative allowance (when they live with the taxpayer, dependent on their age)
- ⦿ Disability allowance (dependent on age and whether or not a carer is required)
- ⦿ Taxable income deductions (e.g. pension contributions, charitable donations, rental property management costs)
- ⦿ Exemptions for annual income and capital gains below a certain amount
Unfortunately, these do not apply for non-residents – nor does the progressive scale of Income Tax rates for residents. Non-tax residents simply have to pay the standard rate of 19% for EU/EEA citizens or 24% for third country citizens on taxable income and property in Spain.
However, non-residents do have the benefit of not being taxed on all of their worldwide assets by the Spanish government. As many countries have a double taxation agreement with Spain – see above in the FAQs – it’s also likely that non-residents won’t have to pay tax on their Spanish income or property in their country of primary residence as well.
Non-residents should also bear in mind that when the non-resident tax rate is applied to their property even when they aren’t earning income from renting it out, this rate only applies to a small percentage of the property’s cadastral value (typically around 1–2%).