Tag Archive for: Updates

Income Tax in Spain in 2025: The Essential Guide

/in

Income Tax in Spain in 2025 outlines how individuals and households across Spain calculate and pay taxes on their yearly earnings. Whether you’re a resident worker, freelancer, or expat, understanding how the tax system works helps you plan better and avoid surprises. Income tax is one of the most common taxes in Spain. This article explains the main elements of the 2025 income tax system, including who needs to file, what rates apply, and how deductions work.

What is personal income tax?

Personal income tax in Spain or Impuesto de Renta sobre las Personas Físicas (IRPF) is a direct tax on an individuals personal income. It is not the same as corporate income tax. Spanish personal income taxes are divided between the state and the autonomous regions. Although the state has created simplified tax thresholds, the rates and tax bands will vary depending on the autonomous region you’re located in.

To get started, you’re required to apply for a tax identification number known as an NIE number. Citizens of the EU usually need to apply for this number after three months of residency in the country, while citizens from countries outside the EU will generally receive their application with their Spanish residency.

Who pays income tax in Spain?

Even if you’re not a legal resident of Spain, you could still be considered a tax resident. You must file your income tax returns in the country if you meet any of the following requirements:

  • Have spent more than 183 calendar days per year within the country.
    It’s important to note that short absences will be considered a part of this number unless you have proof of your tax residence in another country.
  • You have a spouse or dependents who are tax residents of Spain.
  • If you have a business or economic interests located within the country. For example, if you are starting a business in Spain, you will pay income tax in Spain.

Additionally, if you have a Spanish address, licence plate, phone number, bank account, or have used the healthcare system you could also be considered a tax resident unless you can prove otherwise.

Spanish tax for residents

For those employed by Spanish resident companies, the employer is required to withhold an amount of your taxable income to essentially pre-pay your tax returns. The deductions from your paycheck are an estimate of what will be paid at the end of the tax year. Authorities will then deduct these amounts from your final tax bill and refund any excess amounts paid.

In addition, tax residents of Spain must declare any assets held outside of the country through the Modelo 720. This includes bank accounts in your name (or that you manage), insurance, real estate, and more.

Tax in Spain for non-residents

Non-residents of Spain are also taxed on income earned in the country. Typically this is a 24% flat rate on work income and 19% on capital gains and investment income earned in Spain. Next to this, it is important to note that tax returns for non-residents must be filed on an individual basis and not submitted jointly with a spouse.

Earnings subject to income tax in Spain

There are several different sources that Spanish tax residents are required to pay income taxes from. Two types of taxable income need to be taken into consideration when filing your taxes are the general taxable income (renta general) and savings income (renta del ahorro).

Taxes on general income

Spanish tax residents are liable to pay taxes on all worldwide income aside from savings income. This is inclusive of your salary, pension, rent, gambling winnings, etc.

Two parts make up the Income Tax in Spain, a national and regional tax. Generally, the percentages are the same; however, they may vary slightly depending on the region you’re located in. The progressive income tax table is as follows:

Income tax in Spain 2025

Taxes on savings and investments

If you are a Spanish tax resident, you will also be taxed on your worldwide savings and investments. This includes the following:

  • Interest gained on savings
  • Dividends and income gained from holding interests in companies
  • Any income from life and disability policies
  • Income from annuities
  • Capital gains made from the disposal or transfer of assets

The tax thresholds for savings and investment income are:

  • Up to €6,000: 19%
  • From €6,000 to €50,000: 21%
  • From €50,000 to €200,000: 23%
  • Over €200,000: 26%

Taxes on rental income

In addition to the previously mentioned income taxes, you are also liable to pay a tax on rental income in Spain. Any rental payments earned from a Spanish property are subject to a 19% rental income tax for both residents and non-residents from EU or EAA countries. If you are a non-resident not from the EU or EAA countries the flat tax rate is 24%. However, there are a number of deductibles on this tax, including expenses such as house insurance, local property tax, and repairs and management costs. This also includes a yearly 3% depreciation of the property.

Deductions and allowances

Spanish tax residents can enjoy a range of deductions and allowances on their personal income taxes. A standard allowance is granted for anyone under the age of 65 (€5,550), 65 and up (€6,700), and 75 and up (€8,100).

Additionally, if you have dependent children age 25 and under living with you, the following allowances are granted:

  • €2,400 for the first child
  • €2,700 for the second
  • €4,000 for the third
  • €4,500 for the fourth
  • €2,800 as an additional allowance for each child under the age of three

Furthermore, you can typically claim tax deductions for the following:

  • Payments made into the Spanish social security system
  • Pension contributions in Spain
  • Buying or renovating your home in the country
  • Joint tax filings
  • Charitable donations

Income Tax Deadlines

In Spain, the personal income tax year coincides with the calendar year. Therefore, the deadline to file your tax return for the previous year is the 30th of June.

Late Submission Penalties

Penalties for late income tax returns are judged on a case-by-case basis but generally include a fine for late submission and additional interest charges. However, you can usually expect something similar to the following interest rates for each timeframe past the due date:

  • 3 months or less overdue: 5%
  • 3-6 months overdue: 10%
  • 6-12 months overdue: 15%
  • A year or more overdue: 20%

An interest of 5% is typically charged on top of these amounts for payments that are more than one year overdue. In addition to these interest rates, the fine for late submission is €100 for nil returns. However, if the Tax Office prompts the return, the fine will increase to €200.

Next to this, it’s worth noting that in situations where the return is not made voluntarily, the following penalties will apply in addition to the previously mentioned fines and interest rates:

  • Minor infraction: 50% of the tax due
  • Serious infraction: 50–100% of the tax due
  • Severe infraction: 100–150% of the tax due

How to file your Spanish tax returns

Everyone must file a Spanish income tax return in the first year of their tax residency in the country. The forms can be submitted online and require your digital identification certificate.

From the second year of tax residency onwards, it’s only necessary for you to file your tax return if you are earning over €22,000 as your employer will have already deducted the taxable amount. It’s important to note that this only applies if you have only one source of income.

Main changes since 2021

Since 2021, Spain’s income tax rules have gone through a series of updates aimed at adjusting to economic trends, policy goals, and sustainability efforts. In 2025, one of the most notable changes is the increase in tax on savings income over €300,000, which now stands at 30%. This applies both to regular residents and those under the special tax regime known as the “Beckham Law” for inbound expats.

There were also plans to raise the minimum income threshold that triggers the requirement to file a tax return, from €15,000 to €15,876. However, this adjustment was repealed, keeping the threshold unchanged. Another significant shift is the extended availability of deductions for investments in home energy efficiency, electric vehicles, and charging station installations. These deductions now apply through the end of 2025.

At the regional level, some autonomous communities are also reshaping their tax policies. For example, the Community of Madrid introduced tax breaks to attract foreign investors, partly in response to national tax measures. These regional variations are important to keep in mind when calculating your personal tax obligations.

A word from SublimeSpain

Navigating Income Tax in Spain in 2025 doesn’t have to be complicated. Once you understand the key rules, recent changes, and regional nuances, you’re in a much better position to make informed financial choices.

However, if you need professional advice for your personal income tax returns in Spain contact us. Our team of qualified tax and legal experts can offer specialized guidance and assistance to ensure your tax returns are filed correctly and on time.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered as 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.

Minimum Income for Spanish Residency 2025

/in

Dreaming of life under the Spanish sun in 2025? Whether you’re planning to work remotely from Valencia, retire in Málaga, or start a new chapter in Madrid, understanding the minimum income required for Spanish residency 2025 is one of the first and most important steps.

Spain has specific financial thresholds you must meet to qualify for various residence permits, and these change every year. For expats looking to settle legally and stress-free, knowing the income requirements for Spain visas in 2025 can help you plan smarter and avoid delays or denials.

In this guide, you’ll find everything you need to know about the financial requirements for residency in Spain, broken down by visa type. And if you’re unsure which path fits you best, SublimeSpain’s legal experts are here to help you navigate it with confidence.

What is the IPREM and why does it matter?

The IPREM (Indicador Público de Renta de Efectos Múltiples) is a Spanish government index used to calculate eligibility for public benefits, subsidies, and legal thresholds, including those required for residency permits. Introduced in 2004, the IPREM has replaced the minimum wage as the benchmark for assessing income requirements in administrative processes.

When applying for Spanish residency, the IPREM is used to determine whether your financial resources meet the minimum threshold. For example, many non-lucrative visas require proof of income equivalent to 400% of the annual IPREM, while additional family members typically require 100% each. This means even a slight adjustment to the IPREM can significantly impact the total income you need to show.

Understanding the IPREM isn’t just about meeting a number, it’s about being fully prepared for your residency application. That’s why staying up to date on the latest rates and how they’re applied is essential if you’re planning a move to Spain in 2025.

Minimum Income Requirements in 2025

The confirmed IPREM amounts for 2025

The Spanish government has officially confirmed that the IPREM values for 2025 will remain consistent with those from 2024. This means there is no adjustment to the index in the latest Presupuestos Generales del Estado (National Budget).

  • Annual IPREM (12 payments): €7,200
  • Monthly IPREM: €600
  • Daily IPREM: €20

These figures are the standard reference for most residency-related financial calculations in Spain, particularly for visa applications. It’s worth noting that while a version of the IPREM exists based on 14 monthly payments, totalling €8,400, this higher figure does not apply in the context of immigration procedures or visa assessments.

Minimum income for Non Lucrative visa

The non lucrative visa in Spain does not allow you to work or receive salaries. However, it does allow you to have income from other sources.

For 2025, the general rule of thumb is:

  • A single applicant should prove a monthly income of approximately 2.5 times the IPREM.
  • For each dependent, the required income increases by 1 times the IPREM.

To put it into context: if you’re applying alone, you’ll need to show you earn or hold at least €1,500 per month. Add a spouse, and that figure rises to €2,100 per month. These calculations are essential, as they reflect your ability to support yourself and your family without relying on public funds.

Minimum income for the Business visa

The Business visa does not have a minimum requirements, but you need certain documents to apply. For example, you will need to show that you already have clients for a self employed work visa. For the entrepreneurs there are also complex requirements which should benefit Spain.

Minimum income for EU Blue Card

You must have a contract which pays you at least 50% more than the average wage in Spain OR 20% more if the skills are in demand.

Minimum income Au Pairs visa

There is no minimum income requirement, however in Spain, au pairs are paid a minimum of 70 euros per week in pocket money from their host family. Board and lodging are both complimentary.

A word from SublimeSpain

These were the minimum requirements for residency in Spain. However, they can change every year. Make sure you consult with your local authorities or a lawyer well before submitting any applications. You can also visit the government’s official site for further information.

If you have any questions about visa requirements for Spain, feel free to contact us. We will get back to you as soon as possible.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommended seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

National Spanish Holidays in 2025: Dates and Celebrations

/in

If you are living in Spain or planning on travelling to Spain shortly, it’s important to be aware of the public Spanish holidays that will be taking place. Many Spaniards take their vacation time around these times, so tourist areas will be much more crowded than usual. Additionally, many businesses and services will be closed during these days.

How do the Public holidays work in Spain?

Spanish bank holidays are set on the national level, autonomous region level, and municipality level. This means that different areas of Spain may use slightly different dates for certain holidays.

Public holidays often have spectacle, parties, and large street fairs to celebrate them. If you plan on attending any of the festivals in Spain, be sure to arrive early and expect large crowds. Visiting certain holidays can be a great experience with lots of Spanish traditions and food.

Four day weekends

Four day weekends are discouraged by the government. If holidays fall on a Tuesday, Wednesday or Thursday, they are often moved to Monday or Friday. This way four day weekends are discouraged and more work can be done.

Spanish National Holidays 2025

National Public Holidays in Spain

Now, with these previous clarifications, let’s learn more about which are the Spanish national public this 2025.

  • January 1 – New Year – Wednesday
  • January 6 – Dia de Los Reyes Magos – Monday
  • April 15 – Good Friday – Friday
  • August 15 – Feast of the Assumption – Monday
  • October 12 – National Holiday of Spain – Wednesday
  • November 1 – All Saints – Tuesday
  • December 6 – Spanish Constitution Day – Tuesday
  • December 8 – Immaculate Conception – Thursday

January 1 – New Year – Wednesday

During the new year in Spain, families often go to parks or open spaces and light fireworks. They celebrate it by singing around a fire or dancing in traditional clothing. They eat twelve grapes at midnight, one for each stroke of the clock. Next to this, people toast with cava or champagne and have a big party until early morning.

January 6 – Dia de Los Reyes Magos – Monday

The Three Wise Men (or Los Reyes Magos) are important during the winter holidays in Spain. They are the ones who bring Spanish children their gifts the night before the Three Kings Day. There are parades, food, music, and gift exchanges everywhere in Spain on the 5th and 6th of January. While some Spanish families have also embraced the Santa tradition in recent years, it is Los Reyes Magos who are the most important.

April 17 and 18 – Holy Thursday (17) and Holy Friday (18)

Spain is a Christian country with many religious celebrations, and two of the most important ones are Holy Thursday and HolyFriday. The holidays take place on the Holy Week and they fall on Thursday and Friday before Easter Sunday. It commemorates Jesus’ crucifixion and death. The day typically includes services in churches or cathedrals, as well as processions that reenact the Passion of Christ from his condemnation to his burial.

May 1- Labor day- Thursday

In Spanish “Día del trabajador”, is a national public holiday that honors workers and their social and economic contributions. On this day, many people take part in peaceful demonstrations and union-organized events that focus on workers’ rights and current labor issues. Most businesses, schools, and government offices close, giving people the chance to rest or attend community gatherings. The day reflects Spain’s long-standing tradition of valuing social justice, solidarity, and the importance of fair labor conditions.

July 25- Santiago Apostol Day- Friday

It is one of Spain’s most cherished religious holidays. It honors Saint James the Apostle, the patron saint of Spain, whose remains are believed to rest in the city of Santiago de Compostela in Galicia. The day is especially significant in this region, where thousands of pilgrims finish the famous Camino de Santiago. Festivities include religious ceremonies, traditional music, dancing, and fireworks. It’s a day that blends deep spiritual meaning with joyful cultural traditions, reflecting Spain’s rich historical and religious heritage.

August 15 – Feast of the Assumption – Friday

Catholic Spain celebrates the Feast of the Assumption. During this time, people often go to church and attend masses in honour of Mary’s assumption into heaven. Many contests and parties are also held during these days with fairs and feasts. While a “feast” isn’t necessary, there is a long-standing custom of blessing summer harvest crops.

October 12 – National Holiday of Spain – Sunday

The national day of Spain is a celebration of the country’s culture and history. Each city often has a parade with floats, flags, and traditional clothing that will give you a fascinating view of Spanish culture. There is also fireworks and all sorts of activities for families and friends to enjoy together. There are many festivities across the country to honour these events.

November 1 – All Saint’s Day – Saturday

All Saint’s day is a Catholic holiday that aims to remember the dead, particularly family members and friends. During All Saints Day, people have the day off work to celebrate with their families. If you are visiting Spain during this time, you can experience the holiday by joining Spanish families in cemeteries. They often decorate gravesites with flowers or hold special masses at churches.

December 6 – Spanish Constitution Day – Saturday

The Constitution Day is a national celebration where the Spanish people commemorate the adoption of their constitution. It celebrates the fall of the Franco dictatorship in Spain and is seen as a day of democracy. The day is mainly celebrated with Spanish flags, speeches, and parades across the country.

December 8 – Immaculate Conception – Monday

This day is a Catholic holiday in Spain that commemorates the Immaculate Conception of Mary. The Immaculate Conception is a Roman Catholic Church teaching that holds that the Virgin Mary was sinless from the moment of her conception. The holiday is celebrated by attending masses in honour of Mary.

December 25- Christmas – Thursday

Christmas in Spain, celebrated on December 25th, is a festive and family-centered holiday filled with tradition. The season begins in early December and lasts through early January, with key dates like Christmas Eve (Nochebuena) and Epiphany (Día de los Reyes Magos) playing central roles. On Christmas Day, families gather for special meals, often featuring regional dishes and sweets like turrón. While gift-giving is more common on January 6th, some families also exchange presents on Christmas. Streets glow with lights and nativity scenes, creating a warm and joyful atmosphere across the country.

Spanish holidays 2025: All you need to know

Holidays by Autonomous regions and cities

Next to the national Spanish holidays, there are also holidays per autonomous region and city. These holidays are determined by the autonomous community itself, which might offer a different experience for visitors. Normally they can set up to three holidays a year, but this depends per region. Let’s take a closer look to the main regions’ holidays:

Community of Madrid

  • May 2 (Friday): Day of the Community of Madrid

Andalusia

  • February 28 (Friday): Day of Andalusia

Aragon

  • April 23 (Wednesday): Day of Aragon (St. George)

Asturias

  • September 8 (Monday): Day of Asturias

Balearic Islands

  • March 1 (Saturday): Day of the Balearic Islands
  • December 26 (Friday): St. Stephen’s Day

Canary Islands

  • May 30 (Friday): Day of the Canary Islands

Cantabria

  • July 28 (Monday): Day of the Institutions of Cantabria
  • September 15 (Monday): Feast of the Bien Aparecida

Castilla-La Mancha

  • May 31 (Saturday): Day of Castilla-La Mancha
  • June 19 (Thursday): Corpus Christi

Castilla y León

  • April 23 (Wednesday): Day of Castilla y León

Catalonia

  • June 24 (Tuesday): St. John’s Day
  • September 11 (Thursday): National Day of Catalonia
  • December 26 (Friday): St. Stephen’s Day

Valencian Community

  • March 19 (Wednesday): St. Joseph’s Day
  • October 9 (Thursday): Day of the Valencian Community

Extremadura

  • September 8 (Monday): Day of Extremadura

Galicia

  • May 17 (Saturday): Galician Literature Day
  • July 25 (Friday): St. James’ Day (Galicia Day)

La Rioja

  • June 9 (Monday): Day of La Rioja

A word from SublimeSpain

As you explore Spain in 2025, understanding the national and regional holidays helps you connect more deeply with its culture and rhythm of life. Whether you’re planning a getaway, attending local festivities, or just soaking in the atmosphere, these special dates offer the perfect chance to experience Spain at its most vibrant. Make space for the celebrations, and let each holiday enrich your journey. You can check for further details on the Spanish Government official site.

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.

Spain Abolishes Golden Visa Programme

/in

Spain Abolishes Golden Visa Programme in a landmark decision that signals a shift in the country’s immigration and real estate policies. The programme, which allowed non-EU investors to obtain residency by making qualifying investments, mainly in real estate, has now been scrapped due to concerns over its impact on housing affordability, security risks, financial transparency and speculative property purchases.

This move aligns with broader efforts to prioritize local housing needs over foreign investment-driven demand. In this article, we’ll explore why Spain abolishes the Golden Visa Programme, what it means for investors, and what alternative residency options may be available.

Spain’s Decision to End the Golden Visa Programme

Spain’s golden visa programme, introduced in 2013, allowed non-EU nationals to obtain residency by investing at least €500,000 in real estate or through other qualifying investments such as business ventures or government bonds. However, as of 3 April 2025, this route to Spanish residency will be closed. The decision was formally published in Spain’s Official State Gazette (BOE) on 3 January 2025 under Organic Law 1/2025, giving investors a three-month window before the new law takes effect.

The Spanish government, led by Prime Minister Pedro Sánchez, has justified the move as part of its broader efforts to address housing affordability issues. High real estate demand from foreign investors, particularly in cities like Barcelona, Madrid, Valencia, Malaga, Alicante, and the Balearic Islands, has significantly driven up housing prices, making it difficult for local residents to afford homes. The government sees the golden visa as a contributing factor to real estate speculation and aims to ensure that housing is a fundamental right rather than a speculative investment.

Spain abolishes Golden Visa programme

The European Context: A Wider Crackdown on Golden Visas

Spain is not alone in its decision to phase out golden visas. The European Commission has been increasingly vocal about the risks associated with these programmes, particularly in the wake of Russia’s invasion of Ukraine. In 2019, the Commission released a report warning that golden visas and passports pose a security threat, facilitating money laundering, tax evasion, and potential ties to organized crime. Read the European Commission Report.

Several countries have already taken steps to restrict or completely eliminate their residency-by-investment schemes:

  • Portugal removed real estate investment from its golden visa criteria in October 2023 to combat property speculation.
  • The Netherlands ended its golden visa programme in January 2024.
  • The UK abolished its investor visa in 2022 over concerns of “dirty money” entering the country, particularly from Russian oligarchs.
  • Ireland shut down its golden visa scheme in 2023 after warnings of tax abuse and financial opacity.
  • Albania abandoned plans for a similar programme after EU warnings.

However, not all countries are following this trend. Hungary reintroduced its golden visa scheme in July 2024, allowing investors to obtain residency through real estate and education-related donations. Greece and Italy also continue to offer golden visas, albeit with revised investment requirements to manage housing shortages.

Impact and Implications of Spain’s Golden Visa Ban

The fact that Spain abolishes the Golden Visa Programme will significantly impact foreign investors, real estate markets, and the broader economy:

  • End of a popular residency route: Foreign investors who were considering Spain as a golden visa destination must now look for alternative residency options.
  • Potential decline in real estate investment: The programme’s abolition may slow down high-end property purchases, particularly in sought-after cities, but could ease housing affordability pressures for local residents.
  • Regulatory uncertainty for investors: Existing golden visa holders will retain their residency rights. Old rules remain valid for renewal applications. However, new investors must complete transactions before 3 April 2025.
  • EU-wide pressure on remaining schemes: Spain’s move adds further weight to the EU’s stance against golden visas, potentially pressuring other countries like Greece, Italy, and Malta to re-evaluate their programmes.

What Happens to Existing Golden Visa Holders and Applicants?

If you already hold a Golden Visa, there’s no need to worry. Your permit remains valid for its original duration and you can still renew it under the same conditions as before.

There are people who have already submitted an application or plan to apply before the law officially takes effect. In those cases, the government will process the applications under the existing rules, ensuring no abrupt changes for those already in the system.

What Are the Alternatives to Spain’s Golden Visa?

Many prospective investors and expats are now exploring alternative pathways to live, work, or retire in Spain. Fortunately, there are still several visa options available for those looking to establish themselves in the country. Here are some of the most viable alternatives to the Golden Visa in Spain:

  • Retirement Visa
  • Spain Spouse and Family Visa
  • Digital Nomad Visa
  • Spain Work Visa
  • Spain Study Visa

A word from SublimeSpain

Spain’s golden visa programme has played a significant role in attracting foreign investment since 2013. However, rising housing prices and EU pressure have led to its impending abolition. Portugal, the Netherlands, Ireland, and the UK already ending similar programmes. Spain’s decision reflects a broader shift away from investment-driven residency schemes in Europe. As golden visa opportunities decline, wealthy investors will need to explore alternative routes to residency. Meanwhile, European governments focus on prioritizing housing affordability and security concerns over foreign investment in real estate.

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.

Golden Visa Spain: Guide to Spain’s Investment Visa

/in

Update- March 12, 2025

Spain’s Golden Visa program has long been a popular route for non-EU investors seeking residency through real estate and business investments. Introduced in 2013, it allowed individuals to obtain a Spanish residence permit by making qualifying investments, primarily in real estate valued at €500,000 or more. This visa granted holders the ability to live and work in Spain, travel freely within the Schengen Zone, and, eventually, apply for permanent residency or citizenship.

However, in a major policy shift, Spain has abolished the Golden Visa program, marking a significant change in the country’s approach to foreign investment in real estate. This decision aligns with growing concerns over housing affordability, speculative property purchases, and economic inequalities linked to the program. We invite your to read our latest article on this topic “Spain Abolishes Golden Visa Programme” to learn why Spain decided to put an end to it and what this means for current and prospective investors.

What is the Golden Visa in Spain?

In short, it allows obtaining an official residence permit by investing in certain areas under Spanish government conditions. The Visa is an authorisation that will enable foreigners to reside in the country, and for Spain, it presents a new opportunity to increase investment in the country.

What are the requirements for the Golden Visa Spain?

Next to a significant investment that you need to make. The other requirements are:

  • Your age should be over 18.
  • Able to get a NIE Number (Foreigner’s Identification Number).
  • Not refused a previous visa or entry into the Schengen Area.
  • You don’t have a criminal record.
  • Not entered or stayed illegally in Spanish territory.
  • You need to provide bank statements showing that you have enough income to support yourself (and any family that might join you).
  • Won’t become a burden to the Spanish public health system or social security, and have proper health insurance.
  • Not on any kind of terrorist list.
  • Not be a citizen of EEA, EU, Switzerland.
  • Make the investment in Spain needed.

If you are not sure you are eligible, we can help you. Contact us. We can go through your details and see if you qualify.

Travel to Spain for the Golden Visa Documents

Investment to obtain the Spanish Golden Visa

There are multiple ways within the Spain Golden Visa Program. The five investment options for the application are:

  1. Purchasing a property for 500.000 euros or more.
  2. Forming and investing in a new business.
  3. Becoming a company shareholder and depositing in a Spanish bank of at least 1,000,000 euros.
  4. Investing in the Spanish public debt of at least 2,000,000 euros.
  5. Making a Spanish Bank Deposit.

Below you can find a description of each investment option.

Spain Golden Visa: Residency by investment

Purchasing a property for 500.000 euros or more

The first option of purchasing a property for 500.000 euros or more isn’t the only option to get a Spanish Golden Visa, but it is the most common way of investment among ex-pats.

Investing in property is the cheapest option to get the Golden Visa Spain. You cannot apply for residency more than 90 days after buying property. It is therefore essential that you plan your whole process carefully. Spanish bureaucracy is difficult because their processes are done in Spanish and take a lot of time.

You can buy anything more than 500.000 euros. So you can choose to purchase land, plots, buildings, houses, beaches, commercial properties, parking lots, garages, holiday home’s, apartments, flats, beaches, and so on. Next to this, you can buy any number of real estate properties as long as the total is equal to or greater than the minimum required. Buying multiple properties can be a wise investment option. Renting out numerous properties is often easier and more reliable. If you want to rent out your property, you will have to pay the rental income. Renting out properties in Spain is popular because there are short-stay ex-pats, tourists, and people retiring in Spain.

Million euros villa for residency permit

To get the permit, you have to make the 500.000 euros real estate investment on your own. You can borrow the rest of the money from a bank via a mortgage. Getting a mortgage in Spain can be difficult, and you need income and credit history to get the mortgage approved.

Other transaction costs such as taxes are not included in the 500.000 euros. It will cost you more than 500.000 euros to get the application done. The added cost depends on the type and location of the property. The main cost will be VAT (IVA), but other expenses include Stamp Duty and fees. Investors should budget for around 15%. You should also count on lawyer fees and real estate agent fees as well.

A notary deed concludes the acquisition of a property, and the document must bear an official stamp from the notary. The purchase price recorded on the deed is the investment value that the government will consider for your residency application.

Starting a company in Spain

Unlike the other investments, starting a business in Spain doesn’t require a minimum amount of investment. However, the company needs to create new job opportunities, contribute to scientific or technological innovation and make a social-economic impact in the location where your business will be located.

Starting a business can be more complicated than purchasing property and has higher requirements. Hence, we recommend you contact us to guide you during your application process. We offer services to start your company in Spain, and these services range from the company formation itself to bookkeeping and accounting.

Becoming a shareholder of a Spanish company

There is also another option for obtaining a Golden Visa Spain. You can invest at least 1,000,000 euros and become a shareholder of a Spanish company. This option is the second most common way of investment and has fewer requirements than starting your own business.

When applying for the Golden Visa via Shareholder, you must transfer the million euros via a bank deposit. You will need a statement of where you have a million euros investment, and you can get this document from the Spanish Registrar of Investments.

Invest in the public debt of Spain

Investing in the public debt of Spain is another way to get your Golden Visa Spain. You can buy 2,000,000 euros worth of Spanish public debt. This option means you don’t have to invest in a Spanish company or in real estate, which saves on transaction costs such as taxes. However, the downside of this option is that it’s riskier. Spanish public debt can be risky because you’re investing in a government hit hard by the economic crises of 2008. While it has improved, the country is still suffering after the crisis, and everyone knows that the government’s solvency can change fast.

To get the Golden Visa Spain with a public debt investment, you will need a certificate from the bank of Spain or another financial institution stating that you are the owner for at least five years.

Making a Spanish Bank Deposit

The final option to get the Golden Visa in Spain is depositing 1000,000 euros in a Spanish bank/Spanish financial institution. You should maintain the deposit for at least two years, and the money must not be from illegal sources. This option is less expensive than investment in public debt, but the downside is that it’s more challenging to get your money back if you ever need to make an early exit and return home.

Benefits to getting the Spanish Golden Visa

Having a Golden Visa of Spain has many benefits. It gives you:

  • Entry into Spain and the other 26 EU countries (Schengen Zone) (Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland)
  • You only have to visit Spain once a year to keep your permit, and you don’t need to stay long.
  • You will be able to enter and leave Europe at any time, without going through procedures with different Consulates and Embassies.
  • With the Golden Visa Spain, dependent parents can obtain a residence as companions.
  • Your spouse, and children under the age of 18 can also apply for residency.
  • Children over 18 who are dependent on you, and don’t have a family of their own can also apply for a residency permit.
  • Includes work, live and retire permits for the investor and their families.
  • Obtaining Spanish nationality by residence. A person who has a permit, such as a Golden Visa Spain, may opt for nationality because he has been in a residential situation.
  • The duration of a Golden Visa Spain is similar to other visas. The initial residence authorisation is valid for one year. After that, you can request the renewal of the residence permit for successive periods of 2 years.
  • You will have access to public services (health care, schooling, etc)

Spanish Golden visa for Non EU-Members

Golden Visa Spain application process

Below is a simple outline for the application process of a Golden Visa Spain.

  1. Before you apply for this type of residence visa, the applicant should prove their foreign citizenship.
  2. The applicant must then submit an application form and documents which will support their family ties (apart from the financial ones) to Spain.
  3. Get your passport ready. The government will scan biometric data, passport pictures, and documents proving that the applicant is not a security risk.
  4. Confirmation of your investment amount (which depends on your investment option) and documents related to it, which the Spanish authorities will check for compliance with regulations and due diligence procedures (to prevent money laundering).
  5. Bank documents related to required funds (money invested into the country), such as recent bank statements, tax forms of the most recent years, income declarations for the last three years.
  6. Evidence that applicant has sufficient funds available to maintain themself and their family members during their first year in Spain.
  7. The Spanish authorities will then process the application, who will conduct a due diligence search on your background for the previous five years.
  8. If all documents pass through scrutiny successfully and visa requirements meet. The application will get invited to an interview with Spanish consulate officials in their home country.
  9. The government will not process an application until all fees are paid (first stage of 100€ and second one – 250€ per applicant ).
  10. The outcome of the due diligence and processed application will be your Golden Visa which are valid for 12 months.

Golden Visa Spain Process: Investment in Real Estate of Spain

List of documents required

To apply for the Golden/Investor Visa, you will need to provide the following documentation during your appointment.

  • Criminal records certificate: You must also translate this into Spanish. It cannot be more than three months old.
  • National visa form: To complete it, you need to sign it and date it.
  • Photocopy of all passport pages
  • Birth certificate: This must be translated into Spanish be signed by the translator. The translator must swear that they will do a good job.
  • Bank certificate: Which shows you have financial means to satisfy the income requirements.
  • Private health insurance:  If you want to live in Spain, you need health insurance, and it should be from a company that is authorised to work in Spain.
  • A recent photo with white background
  • Valid residence permit and photocopy
  • Valid passport or travel document: You need to have a passport with at least 12 months left and two pages blank.

Documents Needed for Golden visa Investment

Getting permanent residency in Spain via the Golden Visa

Basically, to obtain this residency in Spain, the applicant must prove that they have lived in this country for at least five years. If an applicant has already got their Golden Visa, extended it and stayed for over five years, they can apply for a permanent residence. By further proving your ties with Spain, you will more likely get permanent residence in Spain from the Spanish Consulate. You can also apply for permanent residency sooner than five years; however, if you have resided in Spain on your papers for a cumulative period of 5 years, then obtaining permanent residence is easier.

To make sure you are doing the right thing and applying for this Visa correctly, I recommend that you work with an immigration agency such as ours, which will help you through the entire process. We will provide you with all the necessary documents and make it a success story.

Spanish Golden Visa Residence Permit FAQ

Below you can find common questions asked related to the Golden Visa in Spain.

What are the benefits of a residence permit in Spain?

The main benefit is that you will be able to enjoy all of Spain’s merits. Next to this, you will get permanent residence in Spain after five years of legal residence. After this period, you can travel across Europe (Schengen Area) without needing a Visa. The countries included in the Schengen Area are Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden.

Income requirements for the Golden Visa Spain?

When you have invested in the Golden Visa Spain, you also need to have enough money to support yourself and your family.

Investors – To support the principal applicant, you need to have a monthly income of 400% of the IPREM, which is €564.90 in 2021. The principal applicant must show that they make at least €2,259.60 per month. If you have more family members, it costs more money, which is €564.90 per month extra.

Entrepreneurs – They will need only to prove that they are 100% of the IPREM, which is €564.90 per month in 2021. 150% of the IPREM per month is needed for each family member. More than two more members mean 50% of the IPREM for each family member per month.

Business investment in Spain

What is the NIE number, and why do I need it?

The NIE (Numero de Identificacion Extranjera) is an identification number for foreigners living in Spain. You need the NIE number to purchase real estate in Spain. Through the Power of Attorney, we can acquire the NIE for you, and this way, you don’t have to travel to Spain.

What countries are excluded from the Golden Visa arrangement?

In 2012 the Spanish authorities excluded some countries from eligible nations for the Golden Visa Spain program. The following countries are taken off “list A”. They, therefore, will no longer be qualified to obtain the investor visa: Angola, Argentina, Bolivia, Brazil, Cambodia, China, Dominican Republic, Ecuador, Egypt, Guatemala, Honduras, India, Indonesia, Iran, Jordan, Kazakhstan, Lebanon, Macedonia (FYROM), Mauritius, Nicaragua, Nigeria, Pakistan, Peru, and Sri Lanka.

Who can apply for the Spanish Golden Visa?

Any foreign citizen who invests 500,000 euros or more in Spanish real estate can apply to the Golden Visa Spain. The owner should be a non-EU national (not from Spain or other countries of the EU).

How much does it cost to get all the documents?

Most of the required documents and the investment fee are free of charge. The only cost you will have to pay is the first stage (100€) and the second one (250€). The first stage consists of applying all required documents, and the second one is a payment for further processing of the file.

Real Estate investing for residence permit

How long does it take to get a Spanish Golden Visa?

A minimum would be 20 working days for a Spanish Residency Permit. Sometimes it can take up to 45 working days because some embassies will not issue visas in less than four weeks. Spanish bureaucracy can take time, but that is also part of the Spanish lifestyle. In the summertime, the Spanish administration is slower than in other year periods.

A date needs to be scheduled when you will hand in all required documents at the Spanish consulate. At that point, you will need to be physically present at the consular office in your country, and we recommend being punctual as some embassies tend not to grant flexibility on particular moments.

Just keep in mind that getting the papers can take up to two months to complete.

Will my family members be able to stay in Spain with me if I get the Golden Visa Spain?

Yes, they will be able to stay in Spain with you. Your family can apply for a residence permit after you obtain your Spanish Golden Visa, and they will be able to work, study and live in Spain. Family members that are allowed to stay are:

  • Your children under 18 years old. You must prove that you are the legal guardian of those children.
  • The spouse, if the marriage is valid in the country where it was registered, and there is proof.
  • If they are over 65, and your parents do not have a pension to cover their daily expenses, they will need to prove that they can.

Golden Visa investment: Residency for children and family

What if my last name is different from my spouse’s?

If you are married, your last name doesn’t matter. Your marriage certificate should confirm your marriage. All that matters is that you are legally married and can prove this fact with necessary documents.

Do I need Spanish knowledge?

Most documents are in Spanish. However, it is not needed to know Spanish to get this residence permit. We can help you with the Spanish documents required to obtain this residence permit.

What type of property can I buy to get a Spanish Golden Visa?

Your investment can be by purchasing new buildings or apartments in Spanish cities. Some small towns are not allowed because they are not seen as real estate investment locations. The property can be located in a city where you want to live or just close to it (50 km) because Spanish residency laws say that the property should be located within 30 minutes from your place of residence by car or train. You will not need proof that you will reside at that property. The local authorities will make the final decision when you apply for a Golden Visa.

How can I show that I have enough funds?

You will need to prove that you have enough funds available and that they come from legal sources. There is no official documentation required, but it is advisable to bring all bank statements of the past six months to show the Spanish authorities. We can help you with that too if needed.

How can I show that I have a clean criminal record?

You must prove that you have a clean criminal record from your country of origin or from the country where you are currently living. You can get this document at a police station. However, some countries do not provide this information and our lawyers can raise this issue to find the best solution for you.

Is it possible to hold two passports in Spain?

Yes, you can have dual citizenship with your home country (passport from your country of origin) and Spanish passport (Spanish citizenship). The Spanish passport is good to have because you do not have to apply for a residence card anymore. Next to this, you can travel across the Schengen Area without visa requirements, and you will receive discounts on different attractions and purchases in Europe when showing your Spanish passport. A way to get it is by following these three steps.

  1. Invest 500.000 euros or more in real estate and apply for a Golden Visa residence
  2. After five years, apply for a residence permit
  3. After five years, apply for Spanish Citizenship.

How long can I stay in Spain with a Golden Visa?

The document gives you the right to reside in Spain for one year. After one year, you can extend your Visa for two more years. After this period has passed, you may apply for permanent residency in Spain – Residence Card for Permanence. A permanent residency means that you can reside in Spain indefinitely (you can stay there as long as you like), and your family members can do so as well. After five years of permanent residency in Spain, if you wish, you may apply for Spanish Citizenship. Spanish citizenship means that you can have dual citizenship, which will allow you to hold a passport for two countries at once.

Golden Visa investment types for Non EU citizens

Can I purchase property through a company registered outside Spain?

Yes, you can buy a property with a company registered outside Spain under the following conditions:

a) The company must have a legal representative who is a Spanish resident.

b) This person must be the one in charge of all transactions and demonstrate control of the business (think about signing documents with your solicitor, doing checks for you or even sending bills to the bank).

c) The company is not present in a tax haven jurisdiction. Tax haven’s include countries like the British Virgin Islands, Bermuda, Jersey, and the Cayman Islands.

d) The company should prove that its capital comes from legal resources and not the illegal money laundering channels (the Golden Visa Law says this in detail). We can help you because we know which companies can help you buy property under your name.

Can I submit a Golden visa application without actually travelling to Spain?

You can buy a real estate property through the Power of Attorney. This way, you don’t have to be physically present in your country to complete the process. Often investors choose to buy a property via the Power of Attorney. Purchasing a property through the Power of Attorney means a lawyer will buy the property on your behalf. We will make certain legal requirements and laws in Spain are met so that there will be no problems later on with your Spanish investment visa.

Does the property investment threshold of 500.000 euros include taxes?

No. The 500.000 euros is only the property value and should not be included with any taxes related to the investment. Taxes also vary depending on what type of property it is, and where the property is located. Generally, you will need to pay an additional VAT tax on new properties and ITP when buying resale properties. Additionally, fees are paid at the notary office, registry office, stamp duty for your property documents. We recommend getting in touch with us for an accurate presentation of your investment.

Do I have to live in Spain to get the Golden Visa ?

No, you only need to be a legal resident of Spain (this means having a NIE number, and renting or owning a house). You do not have to live in Spain. This is one of the most significant advantages compared to Portugal’s Golden Visa. It is an advantage because you can purchase property in Spain and still travel freely through the Schengen area.

Can I renew this residence permit?

Yes, you can renew your Golden Visa residence after it expires without any problem as long as you keep complying with the requirements for Golden Visa program.

Can my children work and study when I have the residence permit?

Yes, your children can learn a new language and study in Spain. They will have a residence card (below 18 years) or their ID (above 18 years). If they decide to study abroad from Spain, you will get them enrolled in an international school.

Are my pension rights recognised in Spain?

Yes, your pension rights are recognised in Spain, and you can collect your retirement benefit anytime while living as a legal resident of Spain. That is another reason why this residency permit is attractive to many people. If you have any further questions or concerns, please feel free to contact us, and we are more than happy to help out.

How much tax will I pay for buying property in Spain?

If you are buying a new property, you will have to pay VAT, which varies depending on your property’s region. Generally, it is 10%. If you buy a resale property, you will not have to pay VAT, but you will be required to pay ITP. The amount of tax you need to pay depends on the property.

Apply for a Golden Visa in Spain

How do I find a Spanish Property for my investment?

There are many property investment options. You can find a Spanish property on well-known property websites in Spain such as Fotocasa, Idealista and some smaller local websites. All of these websites are free to use. We recommend using a property agent to look for the property as it will be faster. Property agents can help you find the ideal property for you and arrange a viewing for you. We work with a group of property agents to recommend the best one for you.

How do I know that the property is legal?

We have helped many people buy properties in Spain, and we use only reputable property lawyers to make sure your transaction is legit. If any irregularities with your real estate property would put you at risk, our lawyers will let you know. There can be a lot wrong with Spanish properties like illegal structures, illegal constructions (e.g. a pool), etc. Our lawyers can help you identify these problems to correct them before you buy the property in Spain. Next to this, we ensure your documentation is taken care of according to Spanish law.

What kinds of property can I buy to get the Golden Visa?

The Golden Visa is for purchasing any kind of property in Spain. You can buy a house, apartment or land. It is entirely up to you what type of property you want to buy. We recommend getting an independent and experienced lawyer who specialises in real estate transactions in Spain so that they can look at the market prices and advise you on the most suitable purchase for you.

Our company has been working with local property agents in different regions of Spain (Costa Brava, Costa del Sol, Alicante, Ibiza, and many other places). If you need any help or recommendations on buying a property in Spain and to get the Golden Visa in Spain, do not hesitate to contact us. We will be more than happy to help you in your search for the ideal property.

Can I sell my property later on and keep the Golden Visa?

Yes, you can sell your property and keep the Golden Visa. However, you need to re-invested the money in another property in Spain.

Living with a Spain golden visa via property investment

Is there a minimum stay requirement to keep the Golden Visa Spain?

No, you do not need to stay in Spain for any minimum time. You can come and go as you like but remember that the Golden Visa is only valid for one year at a time. You only need to enter Spain once with your Golden Visa to renew it for the following year. When your Golden Visa expires, you can get a temporary residence permit that is valid for either one or two years.

What makes Spain a great country to live in?

Spain is an open, easy-going society with a lot of history. Spanish people are predominantly relaxed and friendly, which many foreigners like. It has fantastic weather (most of the time), beautiful beaches, mountains, and cities with lots to do. It is a great place to live all year round.

Investment options in Spain

A word from SublimeSpain

The Golden Visa in Spain is a fast way to live and work in Spain as it gives you full access to health care, education and employment. The Spanish Golden Visa gives you easy access to all of these services and makes it easier for foreigners who want to have a life here.

Getting a Golden Visa can be time-consuming and complex, especially if you don’t speak Spanish fluently. SublimeSpain has immigration lawyers that can help you. Contact us, and we will get you your Spanish Golden Visa as fast as possible.

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.

Spanish Inheritance Tax: 4 Steps to Calculate it

/in

The Spanish inheritance tax applies when assets, rights, or debts are transferred from a deceased person to their heirs. The amount owed depends on several factors, including the value of the inheritance, the heir’s relationship to the deceased, and the specific regulations of the autonomous region where the assets are located. Unlike some countries with a flat tax rate, Spain uses a progressive system. This means that higher-value inheritances are taxed at higher rates.

Understanding how inheritance tax in Spain works is crucial for heirs and expats who own property there. The rules can be complex, and regional differences make it even trickier. In this article, we’ll break down how the Spanish tax is calculated, who is exempt, and how you can minimize your liability.

What is the Spanish Inheritance Tax?

Inheritance tax, often called IHT in the UK or “Impuesto sobre sucesiones y donaciones (ISD)” in Spain, is a tax paid on the estate of someone who has passed away. An estate includes everything from property and possessions to savings, investments, and pensions. Payment is obligatory throughout Spain and has been ceded to the Autonomous Communities. This tax is regulated by Law 29/1987.

Many countries have some form of inheritance tax, though the name varies. Depending on where you are, it may be known as estate tax, inheritance tax, or succession tax. However, not every country imposes this tax. Australia, Singapore, Sweden, and Norway have chosen to do away with inheritance tax altogether, allowing assets to pass to heirs tax-free.

But what about Spain? If you’re inheriting property or wealth here, it’s essential to understand how the system works and how much you might have to pay.

Who Must Pay Inheritance Tax?

Inheritance tax must be paid by all heirs, and in some cases, by the following:

  • For inheritances (acquisitions mortis causa): The tax is payable by the successors in title (heirs).
  • For gifts (donations between living persons): The tax must be paid by the recipient (donee).
  • For life insurance payouts: The tax is payable by the beneficiaries.

Keypoints to calculate the Inheritance Tax in Spain

  • The succession tax rate is calculated the same as the gift tax rate.
  • The Inheritance Tax in Spain is generally set by the state. However sometimes the autonomous regions have set their own specific inheritance law and tax allowance.
  • The Inheritance Tax Rate is a progressive tax.
  • Tax residents and non-residents will pay different amounts of Inheritance Tax.
  • Within the Spanish Inheritance, there are several allowances and reductions.
  • Almost everybody (including children and spouses) needs to pay Inheritance Tax.
  • Spanish Inheritance Tax doesn’t have to be paid if the deceased left everything to a spouse or children.
  • To work out the amount of Spanish Inheritance Tax you’ll need to pay, you must first know the value of the estate. This includes all property, money, investments, and possessions.
  • You will also need to take into account any debts that the deceased might have had.
  • Inheritance Tax in Spain must be done within 6 months.

Table for the Inheritance Tax in Spain

Here are the tables used to calculate the Spanish Inheritance Tax when you are liable for the state tax.

Spanish Inheritance tax table

4 steps to calculate Inheritance Tax

The inheritance process in Spain can be complicated and time-consuming since the Spanish inheritance law is broad. Calculating the Spanish Inheritance Tax is an important step to determine how much you will inherit. Below you find the three steps to find out how much Inheritance Tax you need to pay.

1. Determine the value of the assets

When you inherit assets in Spain, you will need to determine the tax value of those assets in order to calculate any Inheritance Taxes that may be due.

In the case of real estate, the cadastral registry is used to determine the property value. If the asset is a vehicle, you will need the initial price of the vehicle when it was new.

Next to property and cars, typical assets that are left behind are jewellery, antiques, and art. These items need to be assessed by an expert in order to determine their value for tax purposes.

Savings accounts or stocks and investments should of course also be taken into the calculation.

2. Determine whether the deceased was a tax resident or non-tax resident

The amount of Spanish Inheritance Tax you need to pay depends also on the fact whether your and the deceased person was tax resident or non-tax resident. If the deceased is a Spanish national or resident, you will be subject to Spanish inheritance and gift tax on their worldwide assets. Otherwise, you will only be subject to Spanish inheritance and gift tax on assets located in Spain. This is known as the “residency rule.” If the beneficiary is a resident of Spain, they will also be subject to inheritance and gift tax on assets gained outside of Spain.

You are considered to be a resident in Spain if you are there for more than 183 days during the year. If you live in Spain for less than 183 days, you will be considered a non-resident. Other reasons you may be considered a tax resident are if your main economic activity takes place in Spain or if your spouse or children live in the country.

There are some exceptions to this rule. For example, if you pay taxes in another EU country or another foreign country with which Spain has a double taxation agreement. You can avoid paying the Inheritance Tax in Spain because you are already paying the Inheritance Tax on the assets located outside of Spain. This is because Spain doesn’t want to give you a double taxation problem

3. Determine what the will says

If there is a Spanish Will for distributing the Spanish inheritance, it will need to be taken into account when calculating Inheritance Tax. The will may state that certain assets are to go to specific individuals. It may also specify that an Inheritance Tax is to be paid out of the estate before distributions are made to beneficiaries.

The Spanish will may also designate a spouse or registered partner as the sole heir. In this case, the surviving spouse may be exempt from paying Inheritance Tax.

If there is no Spanish will to distribute the Spanish Inheritance, the Spanish Inheritance Laws will apply.

Understanding the Spanish Will is important to understand how much succession tax you will need to pay, it will determine the amount of tax allowance you will have.

4. Adjust the taxable amount using deductions, allowances and rebates

There are a number of reductions and allowances that can be applied to the taxable amount in order to reduce the amount of Inheritance Tax that is owed. The most common tax reduction is the deduction for debts and expenses, which can reduce the taxable amount by up to 100%.

Spanish Inheritance Tax Rates are set by the autonomous region where the primary residence of the deceased person is located. Each autonomous region has its own rules regarding deductions, allowances and rebates.

Deductions include the deduction for family members that we discuss in the next part, a deduction from the funeral, a deduction on the age of the car, and a deduction for donations to charity.

Other tax allowances include the allowance for the principal residence, an allowance for small estates, an allowance for agricultural property, and an allowance for business assets.

Each of these deductions has specific requirements that must be met in order to qualify. We recommend reviewing the requirements carefully before claiming any deductions.

If the beneficiary already has existing wealth, this may impact the amount of tax that is owed on the inheritance. In general, the Spanish Inheritance Tax rules state that the taxable amount is increased by the value of any assets that the beneficiary already owns, similar to the wealth tax.

Deductions for your Inheritance Tax

As discussed before, the Inheritance Tax in Spain is calculated for each beneficiary. Therefore the personal circumstances are taken into account. The amount the taxpayer will have to pay is based on a multiplier (coefficient or factor). The coefficient of relationship, age, disability, and existing assets of the beneficiary determines this ratio. The more distant the relationship to the deceased and the greater the existing wealth of the beneficiary the more tax will be owed.

Group I

In this category, children younger than 21 years of age are included. They will be exempt from Inheritance Tax for the first €47,859, which means they won’t have to pay any Inheritance Tax on the first €47,859.

Group II

In this category fall people over the age of 21, their children, spouses and parents/grandparents (including adoptive). They don’t have to pay tax up to €15,957.

Group III

The siblings, aunts, uncles, nieces, nephews, in-laws, and their descendants are among those who will receive an Inheritance Tax exemption of €7,993.

Group IV

The cousins, other relatives, unmarried partners (unless the region permits it) and those who are not related will be in the fourth category. They will not benefit from an Inheritance Tax exemption.

Disabilities

The government provides a disability benefit of €47,859 or €50,253 to those with impairments.

spanish inheritance law non residents

Where to pay Inheritance Tax in Spain

In Spain, the Inheritance Tax is regulated by both the state and the autonomous communities. The autonomous communities have the authority to set their own rates and thresholds, within certain limits set by the state.

As a result, the amount of Inheritance Tax that is payable can vary depending on where the property is located. If the autonomous community didn’t set its own rules, then the general Spanish Inheritance Law applies that the state has set.

Paying your Spanish Inheritance Tax is done on the website or via an appointment at the relevant autonomous community.

When to pay Spanish Inheritance Tax?

The Spanish Inheritance Tax must be paid within six months from the date of death. Late payments are subject to interest and penalties. In terms of time to pay, there is no difference if you are a resident or non-resident of Spain.

During the time that the tax is being paid, some Spanish assets of the estate cannot be distributed to the heirs. If you are unable to pay the Inheritance Tax in full, you can arrange a payment plan with the autonomous region.

Get help with the Spanish Inheritance Tax

It is very common to seek professional help when dealing with the Spanish Inheritance Law, as it can be confusing. A good Inheritance Lawyer will know the ins and outs of the law and can guide you through the process to ensure that everything is done correctly.

They can also help you to minimise the amount of tax that you have to pay by taking advantage of deductions and exemptions.

If you are dealing with a complex estate, it is even more important to get professional help. An Inheritance Tax Lawyer can help to ensure that the estate is divided up correctly and that all of the paperwork is in order. Contact us today to speak to one of our experienced Spanish Inheritance Lawyers.

A word from SublimeSpain

Understanding inheritance tax in Spain can feel overwhelming, especially with the variations between regions and the complexities of the system. Whether you’re inheriting property, assets, or wealth, knowing your tax obligations is key to avoiding unexpected costs. At SublimeSpain, we aim to make legal and financial matters clearer for expats and property owners in Spain. With the right knowledge and planning, you can ensure a smoother transition of assets and potentially reduce your tax burden. Let’s dive into the details so you can make informed decisions.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Minimum Wage in Spain in 2025

/in

For many reasons Spain became the ideal place for many expats. It is common, therefore, that many people wonder what is the minimum wage in Spain 2025 when looking for a job and earning money. In this article you will find relevant information about work and salaries in Spain.

What is the SMI in Spain?

The Salario Mínimo Interprofesional (SMI) is Spain’s legal minimum wage. It sets the lowest amount an employer must pay a worker for a full-time job, ensuring a basic level of income protection.

The SMI is reviewed and adjusted by the government, more particularly by the Ministry of Employment and Social Security in Spain, taking into account factors like inflation, economic conditions, and labor market trends. This means that it is not set by autonomous regions. It applies to all workers, regardless of their industry or contract type, and is typically paid in 14 installments per year.

Minimum wage in Spain 2025

Spain’s minimum wage continues to rise to keep up with economic changes. On February 12, 2025, the government approved a 4.4% increase, raising the Salario Mínimo Interprofesional (SMI) by €50 to €1,184 gross per month (in 14 payments), or €16,576 per year. This change directly benefits around 2.5 million workers, particularly women and young people in lower-paying or part-time jobs.

Minimum wage in Spain over the years

Over the past decade, Spain’s minimum wage has seen a steady rise, reflecting the government’s efforts to improve workers’ purchasing power and reduce income inequality. In 2015, the SMI was set at €756.70 per month, and by 2025, it has increased to €1,184 per month which is a significant boost driven by economic factors and labor policies.

 

Minimum wage in Spain over the last years

The most notable jump occurred in 2019, when the wage rose by over 22% to €1,050, marking one of the largest increases in recent history. These adjustments aim to keep up with inflation and ensure fair wages, particularly benefiting low-income workers, women, and young employees in part-time jobs. However, rising labor costs have also sparked debates among businesses, especially small and medium-sized enterprises, about the potential impact on employment and productivity.

Minimum wage compared to other north European countries

Spain is ranked 20th out of the 124 countries in the worldwide minimum wage list. The minimum wage in Spain is lower compared with other north European countries. Nonetheless, salaries have been going up in the last decade.

In countries like Denmark, Sweden, or Norway, the minimum wage is much higher than in Spain, and the average salary is also significantly higher. The main reasons for this is a lower unemployment rate and a higher cost of living.

The lower cost of living makes it easier for businesses to afford to pay their employees less, which is attracting a lot of business to Spain but makes Spanish people want to work abroad.

Wage consistency

An employee’s pay can be in cash or in kind, but the in-kind cannot exceed 30% of the total remuneration. In-kind income is income that is not monetary. It comprises a wide range of employee benefits such as rent coverage, goods, and transportation costs.

Cost of living in Spain

Spain is a wonderful country to live in, but it can be expensive. The cost of living in Spain varies depending on the city you live in. In general, however, the cost of living in Spain is lower than in other countries in Europe. Some of the main expenses that you will have in Spain include rent, food, transportation, and utilities.

Renting an apartment in Spain can be expensive. The average rent for an apartment in a major city like Madrid or Barcelona is around €1,000 per month, so the minimum wage will not cover that. If you want to live outside of the city centre, your rent will be around €500 for a 1 bedroom, but you will have to commute to work. Transportation by bus is the cheapest way to get around town and is around €1 per ride.

Food in Spain is very cheap. You can find a meal for around €4-€5 at a fast-food restaurant or café. Grocery stores are even cheaper, you can get a full basket for around 20 euros. Utilities are cheap as well, you can pay around 20 euro’s per month for electricity and internet access.

Cost of living in Spain

Salary negotiation in Spain

If you’re considering a job in Spain, it’s important to understand salaries and the country’s minimum wage. Salary negotiation isn’t very common due to high unemployment, so companies typically set a fixed salary that candidates either accept or decline. That’s why it’s best to clarify the salary upfront to avoid wasting time.

Researching average salaries online can also give you a better idea of what to expect. When discussing job offers, ask about additional benefits like meal allowances, transportation support, or other perks that could enhance your overall compensation package.

Collective agreements in Spain

Many industries in Spain operate collective agreements. These agreements set salary levels and working conditions for specific groups of employees. Usually, these agreements are negotiated by the unions and employer’s associations at a national or regional level. This is to avoid wage differences between different companies or regions.

Every year, the unions send a proposal with the expected salary increase to the labour ministry for review. If it is deemed acceptable by the company or industry, the new salary levels will be incorporated. If your employment falls under a collective agreement, you could benefit from a higher minimum salary.

When you are not earning the minimum wage

If you’re not making at least the Spanish minimum wage, you should file a complaint with the Labour and Social Security Inspectorate. They will first evaluate your case. If they find that you have been underpaid, they will issue a fine to the company.

A word from SublimeSpain

Understanding Spain’s minimum wage is key for anyone looking to work and live here. While salaries may not match those of Northern Europe, Spain offers a lower cost of living, making it an attractive place for many expats. The steady rise in the Salario Mínimo Interprofesional (SMI) reflects the government’s effort to improve wages. However, it also raises questions about economic impact and job opportunities.

Whether you’re negotiating a salary, navigating collective agreements, or weighing up the cost of living, being informed helps you make better decisions. Spain remains a fantastic place to live and work, you just need to make sure you know what to expect before making the move.

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.

Cost of Living in Spain With Numbers

/in

The cost of living in Spain is a popular topic among those looking to relocate. For most people, the cost of living is a major factor when deciding where to live. Whether you’re relocating for a job, retiring, or starting a new adventure in the sun, finding out how much things cost can be helpful in preparing financially.

In this blog post, we explore exactly how much money you need to afford a comfortable lifestyle in Spain. Read on for an inside look into one of Europe’s most beautiful countries.

How much do people need to live comfortably in Spain?

Although it is impossible to determine the exact cost of living in Spain, since each person has different expenses due to many factors, we can establish an estimated number. The cost may be higher or lower, depending on the type of life you have, the job you get and your ability to save, among others.

For a single person, the price range varies between 1000 and 1800 Euros. While for a typical family (4 people) the cost is between 2500 and 3500 Euros.

Of course, there are more expensive or cheaper cities, but in general terms the cost of living in Spain is one of the lowest in Western Europe.

Cost of Living in Spain With Numbers To Help You Budget Better
Spanish currency banknotes and coins

Housing rent and utilities in Spain

Rent prices in Spain vary widely depending on the city and location. For example, in major cities like Barcelona, living costs and average rental prices can be quite high. This is due to its popularity as a tourist destination. However, it is considerably cheaper to rent in other cities. The average monthly rent in Barcelona is around €1000 per month for an apartment in the city center.

In Madrid, a beloved city for expats, renting an apartment in the center can cost around €900 per month. Conversely, if you choose to live outside of downtown Madrid, the average price for one-room accommodation drops to an affordable €700 each month.

If you’re on a budget, Seville is your perfect destination. You can rent an apartment in the city center for as little as €600 or outside of town for even more savings at only €450. It’s an ideal city for those looking to live abroad on a tighter budget.

Buying property in Spain

Spain is an excellent option for those wanting to purchase the property. Property prices vary from city to city, as well as region to region.

Generally, the average price of a house in Spain is much lower than in other Western Europe countries. The average house price in Spain is €2.405€/m2 in January 2025.

Cost of products in Spain

Food costs in Spain are quite reasonable, making living comfortable and easy on the wallet. Although it can be difficult to calculate individual grocery costs, $100 per couple per week is usually enough. Furthermore, if you’re used to eating out often, you’ll likely spend less than that on your grocery bills.

The country’s strong agricultural industry produces many local products. Also, its hot weather makes it possible for food items to be available at an affordable cost. Various fruits and vegetables are grown here within its extended growing season, making them accessible even when they’re considered gourmet produce in North America.

Locally sourced meats such as lamb are a bargain at only $10 per pound. Instead, fish and shellfish from coastal regions cost anywhere between $2 -$7 depending on the variety.

The Mediterranean diet is made easy with an abundance of affordable products such as olive oil starting at just $4 a liter or local wine for an unbeatable price of $3.75 per bottle. Spain’s answer to Italy’s cured ham, Jamón serrano, can also be bought easily in the region so you can eat both healthily and well without breaking the bank.

Restaurants in Spain

If you’re looking for a great deal at a low-cost restaurant, save money with the menú del día (menu of the day or special lunch menu). Most places offer this meal between €10 and €15 per person. You’ll enjoy a salad, soup, paella, or vegetable dish as an appetizer, followed by meat/fish entrees (and even vegetarian options), bread, and sometimes dessert & coffee. Washed down with beer or wine- all included in one price.

Enjoy a romantic evening out without breaking the bank. A dinner for two at an average restaurant is only €40, and drinks are budget-friendly too – beer: 2.5€ or less; wine: 5€; cappuccino: 1.65€.

Public transport in Spain

With its longstanding and dependable public transportation system, exploring Spain has never been more convenient or economical. Madrid, Barcelona, Bilbao, and Valencia each have an efficient metro network to get you around the major towns and cities with ease; numerous buses offer intercity routes as well as regional services. High-speed trains are also available for those who want to cover greater distances in a shorter amount of time.

A bus ticket for a one-way ride will cost you about €1.5, and if your stay is longer than that, then the monthly pass costs between €35 to 45, depending on the city. Book your tickets at least two weeks before departure to save some money while traveling from Madrid to Barcelona by train.

Car in Spain

In Spain, owning a car is hardly essential. Spanish cities are designed for pedestrians and most areas can be reached easily on foot or public transport. Furthermore, in big cities like Madrid and Barcelona parking spaces are always scarce to come by.

Additionally, fuel costs an average of €1.3 per liter while routine maintenance will set you back around €150 each month. This is rather expensive if you don’t plan on traveling a lot.

Suppose you are planning on traveling by car. In that case, the cost of buying and insuring one in Spain will vary depending on your age and driving record. Expect to pay around €2,000 for an entry-level model with basic insurance coverage.

Health care

As a citizen or permanent resident of Spain, you are entitled to free healthcare that is funded by your employer through social security contributions. However, in certain circumstances and depending on the region where you live, some treatments may incur an additional fee.

Aspiring expats tend to opt for private health insurance plans as they offer greater coverage and protection. Generally, these types of policies will range from €30-€50 each month for those in their 20s or 30s. However the price increases with age or pre-existing medical conditions. To ensure a secure and tranquil journey in Spain, we highly recommend that you get travel insurance. It is the best way to guarantee your safety when traveling abroad.

Entertainment costs, sports, and leisure in Spain

Investing in a fitness club subscription in Spain costs just €40 per month. If you want to get active, you can also book an hour’s tennis at only €11.

If the movies or theater are more your style, two tickets will set you back at least €16 and €52 respectively. Spain offers plenty of cost-effective activities for backpackers or those traveling on a shoestring budget. Bar hopping is always an option with the average cost of beer per pint at €2.50 and that of cocktails at €5.

 

Cost of living in Spain

Frequent questions about the cost of living in Spain

When you want to move to another country, it is normal to read and research as much as you can. Here are some of the most frequently asked questions that may help you solve some of your doubts.

How much does it cost to live in Spain?

If you’re alone, you can live on €1000 per month in Spain. This includes room rent, groceries, health insurance, rare use of public transport, eating out a few times a month, and shopping moderately. If you want to eat out regularly, shop frequently, and travel in or around the country, then a budget of €1700 is enough to live comfortably. Families with children should budget €2,200 to €2,881 per month. This includes the cost of groceries, rent and utilities, public transport, shopping, education/preschool, and insurance.

This is greatly attributed to its lower per capita income than many other Western European countries. According to The Organisation for Economic Co-operation and Development (OECD), Spain exhibits superior performance in various well-being aspects in comparison to other nations featured in the Better Life Index.

The country notably surpasses the average in crucial areas such as fostering a favorable work-life balance, ensuring the population’s health, cultivating strong social bonds, and maintaining safety. However, it lags behind the mean in generating job opportunities, providing quality education, as well as in promoting life satisfaction among its citizens.

Cost of living in Spain vs the USA

If we compare it with the United States, it’s clear why so many Americans opt to work remotely from Spain. The average salary in Spain is twice as low as those in the US.

US citizens who move to Spain for work, study or retirement will relish the considerably lower living expenses. You only need around 750$-1000$ a month to cover all costs compared to similar accommodations in the United States. If you’re daring enough to make the move from an expensive city, such as New York or San Francisco, to a Spanish city like Barcelona you’ll notice how cheap everything still is.

Cost of living in Spain vs the UK

Spain has been and continues to be a relatively popular destination for the British. More and more Brits are planning to move to Spain after Brexit to enjoy the warmer temperatures, beautiful beaches, and cheap cost of living.

On average, the cost of living in Spain is 114% cheaper than in the UK, and the biggest cost differences are in rent, utilities, and daycare. Although some prices are pretty similar, such as water bills, the Spanish landmass could offer more economical options. For instance, telecommunication companies in Spain give packages including phone and television for your entire family, which can significantly reduce expenses.

Cost of living in Spain vs Canada

Canada and Spain have a few similarities, such as beautiful nature, friendly people, and great healthcare. But perhaps what gives Spain an edge is its cheaper cost of living, access to healthier food, and warmer climate for those looking to get away from Canada’s winters.

On average, the cost of living in Spain is 59% cheaper than in Canada. Although gym memberships and utility bills can be slightly more expensive in Spain, you’ll find the biggest differences in the rent costs, groceries, alcoholic drinks, and daycare.

A word from SublimeSpain

Living in Spain is a fantastic experience. Spain is one of the most beautiful countries in Europe. Spanish culture is full of art and outdoor attractions. But, like in all other countries, all the major cities have their own unique cost of living.

With this valuable insight into how much you can expect to spend each month on rent, groceries, utilities, and other expenses in Spain, you can budget better during your stay.

Moving to a new country can be tricky financially but having an idea of what to expect can help make the transition smoother. So if you’re planning on heading to Spain soon – use this guide as your starting point for creating a budget.

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.

 

What is Considered a Decent Salary in Spain?

/in

Living in Spain remains a popular choice for many expats but what is considered a decent salary in Spain? The country’s average salaries are generally attractive in comparison to other European countries. However, there are variations depending on the region and sector type.

Spain’s remarkable culture and customs have become renowned in every corner of the Earth, thus spurring an influx of immigrants to the country. Before committing to such a life-changing move, though, prospective migrants must consider what salary they would need to sustain themselves comfortably in their new homeland. Read on to learn more about it!

What is a good salary to live comfortably in Spain?

If you are an expat considering relocating to Spain, obtaining a Spanish Working Visa is essential for legally residing and working there. Getting that visa, however, requires a job offer from a Spanish company – but how can you tell if this is truly the right opportunity? Before accepting any position overseas, consider your salary versus what would be necessary to cover living expenses. This way you know for certain whether or not saying ‘yes’ will lead to financial stability abroad.

A good monthly net salary in Spain is generally considered to be around €2,700 for an individual, allowing for a comfortable lifestyle. In 2024, the national average net salary was approximately €1,785 per month, or €2,250 gross. Notice that having a family implies higher expenses and consequently, higher incomes. Families need a net income closer to €4,000 to manage expenses comfortably.

In Madrid, salaries are about 18% higher than the national average. This means that a single person might need at least €3,185 monthly to maintain a similar standard of living. Professionals with mid-level experience in Madrid typically earn between €35,000 and €55,000 annually, reflecting the balance between income levels and the city’s relatively moderate cost of living.

what is considered a decent salary in Spain

Is Spain a good place to work?

Despite having the highest youth unemployment rate and a relatively low average salary within the EU, Spain remains an irresistible destination for expats.

The exceptional quality of life, great work-life balance, and cheaper cost of living make it attractive to young people looking for new opportunities.

For English speakers, Spain’s largest and most vibrant cities are excellent locations to pursue work. With a strong expat network and an abundance of job opportunities, you’ll be able to find your desired career path. We suggest researching SublimeSpain team to apply for a working visa so that you can explore all your prospects for employment.

What’s the minimum salary in Spain?

The Minimum Interprofessional Wage (SMI according to its Spanish acronym) in Spain will increase again during 2025, continuing with the plan of increases initiated in 2018. According to estimates by the Ministry of Labor, the SMI will reach 1145 euros per month in 14 payments, representing a 3% increase over 2024, which was 1134 euros.

Do interns get minimum wage in Spain?

While most of the Spanish workforce is entitled to a minimum wage, unfortunately, this only sometimes extends to interns. If you are still studying, chances are that your compensation will be around €300 for travel or lunch expenses.

However, if you have already graduated and taken up an extracurricular internship position, then you should expect no less than the established minimum wage rate. If you’re considering an internship in Spain, it’s a good idea to review the agreement carefully to understand your rights and compensation.

The average salary in Spain by sector

The average salary in Spain by sector varies significantly based on factors such as experience, location, and company size. However, some sectors reflect Spain’s growing focus on innovation, sustainability, and global commerce. Here’s a breakdown:

Technology

The tech industry is expanding rapidly, especially in cities like Madrid and Barcelona. Professionals in roles such as software development, data analysis, and IT consultancy can earn anywhere from €40,000 to €80,000 annually, depending on their experience.

Engineering

Fields like civil, mechanical, and electrical engineering offer salaries ranging from €35,000 to €65,000. The renewable energy sector is also emerging as a key player, providing competitive pay for specialized engineers.

Finance and Banking

Spain’s financial sector continues to thrive, with financial analysts earning between €40,000 and €60,000 per year. Senior roles, particularly in multinational firms located in Madrid, can surpass €100,000 annually.

Do taxes negatively influence salary in Spain?

Yes, taxation does impact wages in Spain. The average income tax rate for Spanish citizens ranges from 24% to 46%. This is significantly higher than in most European countries and can often take a huge chunk of your salary. Every worker pays taxes monthly and the final amount depends on their sector, location, and average income.

Taxes in Spain include income tax, social security contributions, and other levies. Although taxes can have a negative impact on your salary, you could be eligible for certain exemptions or reductions depending on your industry, age, and marital status.

What is considered a good Salary in Spain?

What is the best-paid job in Spain?

Earning a substantial salary is essential to many people living in Spain. A large paycheck can cover the necessities, such as food, rent or mortgage payments, and transportation expenses; while still leaving plenty of funds for other luxuries. Improved quality of life and access to more opportunities come with a good salary.

Chief Executive Officer

The average salary for a Chief Executive Officer is €171,000 per year. If you want to be at the top of your company earning the highest salaries, these jobs are for you.

High-level positions entail a whole lot of responsibility and risk as Chief Executives need to ensure that organizations remain profitable. To reward them for their effort, CEOs generally receive more compensation than other employees in the organization.

Surgeon

Surgeons earn an average gross salary of €170,000 per year in Spain. By taking up a job as a surgeon, one can expect to earn an above-average salary with the potential for higher earnings.

Surgeons are essential in providing specialized healthcare to people around the globe, making their careers one of the most desired jobs. Their qualifications and experience make these important roles highly financially rewarding–especially in major Spanish cities like Barcelona and Madrid where hospitals and treatment centers are at the heart of it all. Surgeons face the daunting task of making fast and accurate decisions under significant pressure. Therefore, they are usually among the most highly compensated positions in Spain.

Chief Financial Officer

Chief Financial Officers in Spain earn an average gross salary of €133,000 per year. As the second highest-ranking executive in a company, the Chief Financial Officer (CFO) plays an integral role in managing finances and leading multiple departments. From scheduling to budgeting to analyzing spend vs costs figures, it’s no secret that this position is as demanding as it is important. In recognition of their hard work and dedication, CFOs are handsomely compensated for their efforts – job seekers should note that this position comes with a high salary and plenty of job stability.

Airline Pilot

Airline Pilots earn an Average gross salary of €73,000 per year which is considered a decent salary in Spain. Being a pilot in Spain is one of the most sought-after jobs, and for good reason – it pays well! Pilots who take on international flights often earn more than pilots with shorter hauls. The training to become a qualified pilot may be intense. However, the results are sure to be worth your while at the end of all that hard work.

What is considered a good salary in Spain?

Part-time workers in Spain

In Spain, the full-time working week is 40 hours. However, many people choose to supplement their income with additional part-time work. This can be beneficial in terms of raising overall gross pay, as some jobs may be better paid than others while also providing a good work-life balance.

Part-time jobs, such as teaching English, are quite popular among young expats. This is due to the fact that they usually offer a higher salary than most other part-time jobs. These jobs are paid 5% less than the average Spanish minimum wage.

What to do if you’re not being paid the minimum wage in Spain?

If you are not earning the minimum monthly wage, it’s important to check with your employer that your gross salary is in line with both Spanish law and the national average gross wage rate. If you find a discrepancy, it’s best to talk to your employer directly to resolve any differences and ensure you are paid what you are owed.

The Spanish government is committed to ensuring that employers uphold Spain’s minimum wage laws, and fines may be imposed on those who do not comply. To protect employees if their employer becomes insolvent or terminates employment without paying wages owed, they can count on the Spanish Salary Guarantee Fund (FOGASA) alongside the Ministry of Labour. Furthermore, workers are also granted additional protection under specific circumstances outlined by labor regulations regarding strike action.

A word from SublimeSpain

Determining a decent salary in Spain depends on each individual’s situation. Factors such as place of residence, amount of education and experience, cost of living in the area, and any other unique circumstances will all play a role in determining one’s salary.

No matter the exact specifics, salaries within Spain should provide enough money to live comfortably while still allowing room to save and invest. With economic policies improving in recent years, many citizens have managed to achieve higher wages than before. This is an encouraging sign for those looking to move there or relocate within the country.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

How Much are Utility Bills in Spain?

/in

Bills in Spain can vary greatly depending on the required electricity, gas, water, and other services. Before taking the plunge and investing your time, energy, and finances into living in Spain, you should consider some practical matters. One of those is understanding what kinds of bills and expenses you can expect as a resident. Read on to learn more!

What bills do you pay in Spain?

Trying to guess how much your utility bills in Spain will cost is almost impossible, as the amount varies drastically depending on the size and condition of your home. However, if you already own a Spanish property or know what kind you want to buy, it’s possible to use this info in order to calculate an estimate of what your monthly payments may be.

 

Bills in Spain

Local Property Tax

Once the title deed is signed before the Spanish Public Notary, you must pay the local property tax, IBI (Impuesto de Bienes Inmuebles). This is a yearly tax that depends on the cadastral value of your house. However, you can sometimes receive your first one for up to two years. These bills are sent directly to a Spanish property’s address. The specific percentage of taxes owed ranges from approximately 0.405% to 1.166%, depending on the province where the property is located. It’s worth noting that the cadastral value of a property is reevaluated periodically to ensure that taxes remain up-to-date.

Electricity Supply

Your energy supply bills vary hugely depending on electricity prices, the electricity company you use, and your own electricity consumption. When setting up an electricity supply to Spanish property, electricity companies will require proof of ownership (title deed) and proof of residence in Spain (a Spanish bank account).

If you’re living in Spain, it’s normal to expect your monthly electric bills to be between €60 and €100. But that can change depending on the contracted kW of your home, its size, and how much time you spend there. Small or medium-sized homes should have a 3.45kW contract. Larger homes need 5.75kW, while those with heavy electrical consumption require 10.35kW. To reduce electricity bills in Spain, it’s worth considering electricity-saving measures such as using energy-efficient appliances and installing solar panels.

Water Supply

Water in Spain is provided by local authorities and municipal authorities, although in some areas, there are local public services responsible for water supply. Approximately one quarter of the country relies on privately owned suppliers, another half primarily utilizes public sources for their supply, and the remaining area relies on private and public entities to maintain adequate water service. The price for a monthly water bill can fluctuate depending on the amount of water you use and how many people live in your home. The cost of a monthly water bill is usually between €30 and €150 depending on your location, consumption, and the type of contract you have in place. You should expect to pay between 40-60 euros each month for your water expenses.

When relocating to Spain without utilities, make sure the water contract is transferred into your name. Head over to the local town hall or check online for details on how to register as its new owner. Notice that this process may differ depending on where you live. You need to bring your ID and your address with you to register.

Bottled Gas

Bottled gas costs vary greatly depending on your location and the bottle size you purchase. The gas is used to heat water and cook food, so the cost can be quite high. After moving into your new home, contact your local gas supplier and request that they turn on the gas. Selecting the perfect gas supplier for your home in Spain is just as easy as selecting an electricity provider. Each region has its own primary supplier; however, you still have a few options. Once this has been done, a meter reading will be taken and you’ll become an official customer. Fortunately, these can easily be organized with your provider at around €60-€70.

Community Fees

In addition to electricity bills, utility bills, and water bills, you need to consider community fees if you own property in Spain. As a homeowner of property in a “community”, you are responsible for contributing financially towards the upkeep and maintenance of communal facilities. The amount allocated for these fees depends on various elements. Community fees can vary greatly depending on the region and size of the property, but they usually range from €50-€250 per month.

Bills in Spain

Telephone

On average, you will be spending anywhere from 30 to 55 euros each month for your landline phone and broadband internet connection of between 50Mb to 300Mb. Most telephone companies offer discounts for long-distance calls and data packages.

Grocery Bills

Grocery bills in Spain also vary greatly depending on where you shop and the type of food/drinks you purchase. The average grocery bill for a family of four is €150-€200 per month. Supermarkets such as Carrefour, Mercadona, or Lidl typically offer the best prices.

Rent

If purchasing a home is not an option, you may consider renting in Spain. Rent cost is cheaper inland than it is along the coast and more expensive in tourist areas. A 1-2 bedroom apartment outside of a city typically costs €500 per month while one inside a city can range from €675 – €750. On the other hand, if you’re looking for something bigger such as a villa complete with its own pool, expect to pay at least €1,000+ per month.

Running a Car in Spain

The public transportation system in Spain is outstanding. Still, many choose to purchase a car after they relocate since it’s the fastest and most comfortable way to get from one place to another—especially if you live in an isolated holiday spot. Car insurance rates can vary significantly depending on the size and model of your car, but expect to pay anywhere from €85-€150 each month for a medium-sized vehicle.

Insurance in Spain

Depending on your age and history, life insurance can be costly. Health insurance is necessary and you should budget at least 30 euros per month for it. Additionally, be ready to spend around 250 euros yearly on building and content coverage.

A word from SublimeSpain

If you are preparing to move into your new Spanish residence, opening a local bank account beforehand is essential. Not only is this the most convenient way of collecting utility bills via direct debit, but it will also simplify many everyday tasks. Bills in Spain are paid through automatic transfers from your bank. Therefore, you’ll need to input these data when signing up. While it’s possible to use other payment methods, this will likely remain the easiest option.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Most In-Demand Jobs in Spain in 2025 With Salaries

/in

Spain is a popular tourist destination known for its rich culture and beautiful architecture, but did you know it’s also one of the best places to consider for work in 2025? In this article, we will show the most in-demand jobs in Spain in 2025 with salaries for you to be informed.

Spain is experiencing many job opportunities, from hospitality services to IT companies. As the country continues to expand its economy and job market, now might be an ideal time to explore living in Spain while taking advantage of these great employment options.

Jobs in Spain 2025: Top Opportunities for Expats

As 2025 unfolds, Spain remains a top destination for expats seeking career opportunities and an exceptional lifestyle. The job market is evolving, and demand is rising in key industries. Here’s a breakdown of the most in-demand jobs in Spain in 2025, complete with average annual salaries.

Jobs in Spain 2025

1.Technology and ICT

Spain has cemented itself as a tech hotspot in Europe, with companies investing in digital transformation. Roles in information technology are in high demand, particularly in cybersecurity and software development. With the ever-growing Spanish digital market, companies are in need of software developers at all levels who can keep up with this fast-paced technological world.

  • Cybersecurity Analysts

As data breaches become more common, professionals who can protect sensitive information are highly valued.

Average Salary: €32,000–€45,000 per year.

  • Software Developers

Businesses need developers to create, maintain, and improve their applications and digital platforms.

Average Salary: €30,000–€40,000 annually.

2. Healthcare Professionals

The healthcare sector in Spain is under strain due to an aging population, creating opportunities for expats with medical expertise. Surgeons are among the most highly paid professions today, given the knowledge and training required for such a critical role. The annual salary is around 59,000 euros gross per year -far higher than those in other fields due to the level of risk associated with it.

This high-paying career requires extensive study and time invested before becoming qualified, an essential element that makes their profession financially rewarding.

  • Nurses

Both public and private hospitals are seeking registered nurses to meet growing patient demands.

Average Salary: €24,000–€35,000 per year.

  • Doctors

Specialists in geriatrics, emergency medicine, and physical therapy are especially sought after.

Average Salary: €45,000–€70,000 annually.

3. Renewable Energy Engineers

Spain’s commitment to sustainability and renewable energy projects is driving demand for engineers specializing in clean energy solutions.

Average Salary: €30,000–€40,000 per year.

 

Jobs in Spain 2025

4. Construction and Skilled Trades

Spain’s construction boom continues, with significant investment in infrastructure and urban development. Expats with trade skills are in demand.

  • Plumbers, Bricklayers, and Carpenters

These roles are crucial for ongoing construction and renovation projects.

Average Salary: €20,000–€30,000 annually.

5. Hospitality and Tourism

Hospitality is another sector that has seen an increase in demand over the last few years, especially on the Spanish coasts -like Costa del Sol. The hospitality industry employs thousands of Spaniards annually. Additionally, with Spain’s increasingly international landscape, it is also becoming a great place for expats to find hospitality jobs – from hotels and restaurants to bars and clubs. These are great summer jobs or even long-term opportunities if you can find the right employer.

  • Hospitality Staff

Hotels, restaurants, and resorts need skilled workers for customer-facing and operational roles.

Average Salary: €18,000–€25,000 per year.

  • Tour Guides and Event Planners

Expats fluent in multiple languages are especially valuable in these roles.

6. Education and Language Training

As globalization drives the need for bilingualism, English teachers continue to be highly sought after in Spain. Those who possess the necessary qualifications, and speak Spanish and English language competence can easily find expat jobs in Spain teaching students of all ages in various educational facilities. If you want to work on your English language skills, this is a great option.

  • English Teachers

Opportunities abound in international schools, language academies, and private tutoring.

Average Salary: €20,000–€30,000 annually.

A word from SublimeSpain

The job market in Spain is set to become even more competitive in the years ahead. By 2025, many of the highest-demand sectors are expected to see significant growth, with new jobs expected to join existing ones. These range from nurses and doctors to software developers, web designers, and data scientists. All these professions require different skills and expertise that can be obtained through university courses, internships, and apprenticeships.

With a growing economy heavily focused on exporting goods and services around the globe, it’s clear that there is an increased emphasis on professionalizing certain sectors to meet global demands. As such, those looking for employment should consider exploring any potential opportunities as soon as possible.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Digital Nomad Visa in Spain

/in

Spain is one of the most chosen countries by remote workers who decide to migrate from their country of origin. In this article, we will discuss all you need to know about the digital nomad visa in Spain.

Why do people choose this beautiful country to live in?

The rise of remote work has opened new doors for professionals seeking flexibility and adventure. Spain, with its stunning landscapes, warm people, and world-class cuisine, is a top choice for digital nomads looking to balance work and lifestyle.

For many, the country offers more than just a picturesque backdrop. Spanish citizenship provides permanent residency, voting rights, and the freedom to live and work anywhere within the European Union (EU). While there are several ways to obtain citizenship—such as through residence or marriage—this article focuses on the increasingly popular Digital Nomad Visa.

Who are the digital nomads?

Digital nomads are individuals who use technology to work remotely from anywhere in the world. They typically rely on laptops, smartphones, and internet connectivity to perform their jobs, which can include anything from freelance writing and web development to social media management and graphic design.

Remote workers often travel frequently and may live in multiple locations throughout the year while maintaining their work responsibilities. This lifestyle allows them to experience different cultures and environments while maintaining a flexible work schedule.

Digital Nomad Visa in Spain

What is the digital nomad visa in Spain?

In 2022, the Spanish Congress approved the Law for the Promotion of the Emerging Companies Ecosystem, also known as the “Startups Law“.

As reported by the Government in a statement, the objective of this legislation was to generate “an entrepreneurial ecosystem with an innovative vocation” which would encourage the “creation and relocation of startups” and attract talent and capital from other countries.

Within the framework of this law, the creation of a “special Digital Nomad visa for holders who work for themselves or for employers anywhere in the world, in national territory” was announced. This visa allows foreigners to settle in Spain and work remotely.  

One of the advantages is that the years spent in Spain working with the digital nomad visa count towards the application for Spanish nationality by residence.

How to apply for the Digital Nomad Visa?

To apply for the Digital Nomad Visa in Spain, you need to follow these steps:

  1. Determine your eligibility criteria: Check if you meet the requirements to apply for the digital nomad visa. This includes having a job or being self-employed, having a reliable monthly income, and working remotely.
  2. Gather necessary documents: Collect all the required documents, such as a valid passport, proof of income, and valid health insurance.
  3. Fill out the application form online: Go to the electronic site of the Ministry of Inclusion, Social Security and Migration and fill in the application form online.
  4. Submit your application: Once you have filled out the form and attached all the required documents for the digital nomad visa, submit your application.
  5. Wait for a response: After submitting your application, wait for a response from the Spanish authorities. They may ask for additional information or supporting documents.
  6. Get your visa: If your application is approved, you will receive your Digital Nomad Visa. You can then travel to Spain and start working remotely.

It’s important to note that the requirements and process for applying for the Digital Nomad Visa may vary depending on the country you’re applying from, i.e your home country, and the country you’re applying to. So, make sure to check the specific requirements and guidelines for your situation. Also, there might be a visa application fee you will need to pay to get your digital nomad visa.

What documentation must be submitted to access the Digital Nomad Visa?

As established by the Spanish Ministry of Inclusion, Social Security and Migration, the following documents must be submitted:

  • Printed application of the official model (EX-05) in duplicate, duly completed and signed by the hiring company.
  • A complete copy of a valid passport or valid travel document.
  • Copy of the training required for the exercise of the profession, when applicable, duly approved.

In addition, a digital nomad must present the required documents to identify the company that is requesting the authorization:

If it is an individual entrepreneur

Copy of the NIF or NIE, or consent to check identity data through the Identity and Residence Data Verification System.

If it is a legal entity (S.A., S.L., Cooperative, etc.)

  • Copy of the NIF of the company and copy of the deed of incorporation duly registered in the corresponding Registry.
  • Copy of the public document accrediting that the signatory of the authorization request is the legal representative of the company.
  • Copy of the NIF or NIE or consent to check the identity data through the Identity and Residence Data Verification System of the signatory of the application.
  • Signed work contract. Original and copy must be submitted. The copy will be stamped by the Immigration Office and returned for subsequent presentation by the foreigner together with the application for a residence and work visa.
  • Documentation accrediting that the national employment situation is not taken into account (See information sheet with the assumptions and the necessary documentation).
  • Accreditation that the company guarantees the necessary solvency, through the declaration of the IRPF, the VAT, the Corporate Tax, or the report of the labor life of the company (VILE), referred to the last three years. A descriptive report of the occupation to be performed must also be provided.

What are the requirements to obtain the Digital Nomad Visa?

The requirements to apply for the digital nomad visa are the following:

  • Not having a criminal record.
  • Have graduated from prestigious universities, professional training and business schools or have at least three years of professional work experience.
  • Work as an employee for a company registered abroad -or for more companies located outside Spain- or be self-employed. The latter cannot have more than 20% of their income coming from Spanish companies.
  • Demonstrate the existence of real and continuous activity for at least one year of the company with which they maintain the labor or professional relationship.
  • Demonstrate an employment or commercial relationship with the company for at least the last three months prior to the presentation of the application, as well as documentation that the company allows them as workers to perform the work activity remotely.
  • To have medical insurance.

What is like being a digital nomad in Spain

Tax advantages of the digital nomad visa

Apart from all the advantages offered by this residency seen so far, one of the main attractions of this new permit comes from the tax side.

The additional argument created to make this permit an even better option is the special tax regime that will allow digital nomad visa holders to save taxes. Basically, you will be taxed through a tax regime under the income tax as an optimized non-resident.

After understanding how taxes in Spain really work for foreigners, we can easily understand that paying non-resident income tax instead of the general income tax that residents must pay allows you to pay much less on the income it generates.

How it works

In case you have not been in Spain for the last 5 years (instead of 10, as the general rule establishes); you will be allowed to pay a flat tax rate of only 24% on your income. Instead, you would pay a progressive rate that can go up to 48%.

In order to be considered a non-resident for tax purposes, you will have to initiate a separate application process from the residency process. You will do so with the Spanish Tax Agency within 6 months of obtaining your residency authorization. This is a process comparable to the Beckham Law.

This, in addition to allowing you to pay only 24% on income derived from work up to €600,000, will also save you the need to pay wealth tax or have to make the informative declaration known as model 720.

Finally, digital nomad visa holders will be able to request the deferral of the IRNR in the first and second years with a positive taxable base (without interest).

This advantageous tax regime will be extended for 5 years as long as you maintain your residence as a digital nomad, subsequently moving to the general regime.

Special visa conditions for digital nomads

Residence limit

According to the Official State Gazette (BOE) published on December 21, 2022, the visa for teleworking, of an international character and oriented to digital nomads, authorizes its holders to reside in Spain for up to one year.

Once that time has elapsed, the option to apply for residency is enabled, whereby the holder could stay three more years in the country. Permanent residence can be applied for after five years of residence “as long as the conditions that generated the right are maintained”.

Education

One of the conditions of the digital nomad visa is that the person must be a university graduate, have professional training in schools of “recognized prestige”, or have more than three years of work experience.

Employment status

The visa will be considered when the interested party seeks to reside in Spain “for teleworking of an international character”. This means to exercise a professional or labor activity at a distance for firms established outside the country, “by means of the exclusive use of a computer, telematic and telecommunication means and systems”. The law also states that the holder may perform work for a company registered in Spain, as long as the percentage of such work does not exceed 20% of the total professional activity.

Tax advantages

The Law for the Promotion of the Emerging Companies Ecosystem allows digital nomads to be taxed under the Non-Resident Income Tax instead of the Personal Income Tax (IRPF). They will also have access to the special tax regime, which applies to workers who relocate “with the aim of attracting foreign talent”.

Benefits of the Digital Nomad Visa in Spain

There are many benefits to getting a digital nomad visa in Spain. Some of these benefits include:

  • The ability to live and work in Spain for up to a year
  • Easy access to other European countries
  • High quality of life
  • Great weather
  • Beautiful beaches and scenery
  • Vibrant culture and nightlife
  • Low cost of living compared to other European countries

Being a digital nomad in Spain has many advantages

 

Best Places for Digital Nomads in Spain

Spain is an excellent destination for digital nomad visa holders seeking adventure, good weather, great food, and a relaxed lifestyle. With its vibrant cities, beautiful beaches, and rich culture, Spain is an ideal place for remote work. Here’s our list of the best places for a digital nomad in Spain.

Barcelona: Experience a Vibrant City Life

Barcelona is a vibrant city with a rich history, stunning architecture, and a thriving culture. As a digital nomad, you can enjoy working in a coworking space, exploring the city’s many coffee shops, and taking advantage of its bustling nightlife. Barcelona is home to several startup hubs and co-working spaces, including Betahaus, a popular spot for entrepreneurs and freelancers.

Valencia: Enjoy the Best of Both Worlds

Valencia is a beautiful coastal city located on the eastern coast of Spain. It offers a perfect blend of modern and traditional lifestyles, making it an ideal destination for digital nomads. The city boasts an impressive startup ecosystem, with several co-working spaces and startup accelerators. The city also has a rich cultural heritage, including the famous Las Fallas festival. This makes it an exciting place to live and work.

Madrid: The Heart of Spain

Madrid is the capital of Spain and the country’s largest city. As the hub of business and culture, it attracts many digital nomads from all over the world. The city is home to several co-working spaces, including Impact Hub Madrid and La Guarida Creativa, where you can network and collaborate with other freelancers and entrepreneurs.

Malaga: A Sunny Coastal Town

Malaga is a charming coastal town with great beaches, a relaxed lifestyle, and a low cost of living. It is an excellent destination for digital nomads who want to enjoy the Spanish way of life without breaking the bank. The city has several co-working spaces, including Coworkidea and La Colmena, where you can work and network with other remote workers.

Granada: Experience a Rich Culture

Granada is a historic city located in the south of Spain. It is famous for its stunning architecture, beautiful old town, and rich cultural heritage. The city has several co-working spaces, including La Expositiva and Cowork Granada, where digital nomads can work in a collaborative environment while enjoying the city’s charming atmosphere.

A word from SublimeSpain

If you’re a remote worker looking to live and work in European countries, Spain is a great option. With the new digital nomad visa, it’s easier than ever to stay in the country for up to a year. With its beautiful weather, beaches, and culture, Spain has a lot to offer digital nomads. So, start planning your trip today and discover all that Spain has for you.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Tax Deductions in Spain For The Self Employed

/in

Tax deductions in Spain for the self-employed can provide a great opportunity to save money and create a more stable income. Freelance Tax deductions are available on the cost of materials, tools, and maintenance expenses for self-employed or independent workers. Tax deductions may also include other professional costs such as training, exhibitions, and conferences – all of which could provide an invaluable resource for self-employed individuals in Spain.

This is an absolute must-read if you want to become a freelancer in Spain. Without a doubt, the taxes that come with self-employment are one of the most crucial aspects to consider as part of your choice. Read on!

What are tax deductions for self-employed?

In Spain, two taxes offer deductions to self-employed workers: the Personal Income Tax (IRPF) and the Value Added Tax (IVA). Those who take advantage of these tax reductions can greatly reduce costs.

Personal income tax is a progressive tax levied on the income of individuals. Employed workers are taken off their payroll each month. In the case of the self-employed, they must withhold a small amount on each invoice they issue. Both employed and self-employed workers have to make the annual income statement to balance the amounts. IVA is a direct tax that taxes consumption and is added to the amount of each item or service for sale.

SublimeSpain offers tax deductions for the self employed

 

Income tax or IRPF (“Impuesto de la Renta de las Personas Físicas”)

Almost every quarter, self-employed people must pay the Spanish tax agency (Agencia Tributaria) for personal income taxes. This tax is known as IRPF or personal income tax by the Spanish tax authority. As a freelancer, you’ll be dealing with the IRPF on a regular basis:

  • when invoicing clients
  • setting aside for quarterly payments
  • calculating your annual tax report

Thus, if you file your quarterly tax return, 20% of it should be submitted as an advance payment. You must complete 130 (Modelo 100) and 131 (Modelo 130) forms, and this preliminary report will make preparing the annual tax return easier.

How to file IRPF quarterly

Every 3 months, self-employed individuals must submit their Personal Income Tax (IRPF). This declaration includes your income decreased by any relevant expenses. If you’re a freelancer living in Spain for more than 183 days each year, then you will become known as a tax resident. As such, all income generated from any self-employed activities must be declared and taxed accordingly.

Consequently, when filling out the quarterly IRPF documents you are essentially paying a 20% prepayment in anticipation of your income statement. To file your Personal Income Tax, you’ll have to turn in Tax Form 130 (Modelo 100) or Tax Form 131 (Modelo 131) every quarter. Later on, these quarterly reports will help you file your annual tax return (Declaración de Renta).

How to calculate IRPF in the Annual Tax Report

It depends on several factors, such as your economic situation and the type of activity that you pursue. In general, tax rates range from 19% to 47%.

  • From 0 to 12.450€: 19%
  • From 12.450€ to 20.200€: 24%
  • From 20.200€ to 35.200€: 30%
  • From 35.200 to 60.000€: 37%
  • From 60.000€ to 300.000€: 45%
  • Above 300.000€: 47%

Depending on the specifics of your circumstances, you may use additional allowances to reduce what you owe in terms of the base rate.

How to apply IRPF retention when invoicing a client

When voicing clients in Spain, the percentages of IRPF that the customer has to remit will also be included on your client’s invoices. IRPF’s annual costs vary, though the average is 15% deducted from all the fees paid by the client. Your customers withhold IRPF percentages and pay them back to the Tax Office in your name.

VAT for self-employed workers (“IVA”)

Once each quarter (between the first 20 days of each quarter, on January, April, July, and October), you file and pay your quarter VAT at the local tax office. In Spain, VAT is 21%, and you will apply that extra rate to the different invoice services you send to your clients.

How to file VAT

In order to file your VAT, you must fill out and submit a Modelo 303 form. This document is mandatory for all self-employed workers that have to pay social security contributions or freelance tax (Autónomos).

When filing this form, you must provide evidence of the expenses incurred, such as food expenses, maintenance costs or professional fees.

During each quarter, each invoice you send will include an extra 21% on your prices. For each business-related invoice you received and for all those invoices for work-related products you have purchased (like a new phone or computer), you will pay that 21%.

At the end of the quarter, you must sum up all VATs you received, subtract VATs paid, and the difference is what you must pay to the Tax Agency. You will do that using Model 303.

You may be exempt from paying this tax if you deal with business customers outside Spain (but within the E.U.) and are VAT registered.

How to deduct VAT

For instance, if you’re a computer programmer and purchase software, computers, or ergonomic chairs, they’ll be tax deductible. If you submit an invoice for non-business items like a refrigerator or table set with six chairs, unfortunately, it won’t pass silently but will qualify should your business specialize in hospitality services.

How to file your annual VAT

At the end of each year, you must also submit Model 390, including a summary of all VAT transactions throughout the year. Completing this annual VAT declaration form will provide you with a comprehensive overview of all your incoming and outgoing VAT transactions. You can do it quickly and conveniently online through the Agencia Tributaria website. However, if you deliver educational services, artworks, or specific types of freelance writing, then filing your Value Added Tax Return is not required – but that also means no tax deductions for those activities.

Which are the expenses you can deduct?

But now comes the good news: what you can deduct and all those concepts that will help you save money. That is because, on your income tax declarations, you can deduct several invoices you have been paying throughout the year to lower the final tax base.

You can get a tax credit in Spain if you have paid freelance or self-employment taxes. In most situations, a deductible item should be credited to the yearly return. If not, you cannot file a tax deduction. As business owners, you can claim deprecated assets on your company property.

What exactly is deductible?

  • Your monthly social security contributions
  • Any type of expense related to sustaining your freelance activity
  • Tax and accounting invoices you paid
  • Any tool or service that works as a subscription base that you use for your working operations
  • Your health insurance monthly payment (up to 500€)
  • Utilities like your phone and internet invoices
  • Supplies, like your office
  • Vehicles, in case those have been used for your freelance activity
  • Tax services maintenance expenses

Important note:

For all deductions to be applicable, you must prove the corresponding expenditures through formal invoices, in which your name, address, and tax identification number must appear.

Tax deductions in Spain for the self employed

How to file freelance tax in Spain

After filing a tax return with the tax authorities, your earnings must be reported at least three times per year. You declare your earnings from October to December and pay 20% of your tax. This is a Model 131 form, and it is required for every employer to submit a request. Every self-employed person must use model 132 for their freelance income tax in Spain. Each year, you will do your yearly income tax declaration, which uses model 100 and contains all the incomes you received and taxes you paid during the previous year.

Options to file tax returns

There are two different options to file tax returns: online with the Spanish tax authority (Agencia Tributaria) or through a personal visit to your local Tax Office. In either case, you must provide all personal information, income, taxes paid, and deducted expenses in the annual income statement.

Additionally, there are extra tax declarations that you may need to submit depending on your personal situation and business activities. For instance, If 70% or more of your clients make tax withholdings on your fees, on each invoice, you send to your clients, you can choose to subtract from the total a standard 15% income tax, or a reduced 7%. Then, once you do your annual income tax declaration, and according to how much you have generated during the year and after subtracting all the different allowances and bonification, you will pay (or receive) the difference.

But there is also another alternative. Using Model 130, you would quarterly pay, in advance, a 20% income tax for all the incomes you declare quarterly (without subtracting the 15 or 7% on each invoice). But, if you use a modular system called “estimación objetiva”, you would use model 131 instead, and your income levels will be based on estimations rather than actual income.

A word from SublimeSpain

From the look of it, taxes for a self-employed worker in Spain are quite favorable given all the deductions available to qualified individuals.

Being a freelancer means spending your money on supplies and services. However, you can offset some expenses against your personal income tax, social security contributions, and freelance tax deductions. Knowing which items are eligible for these deductions is key to maximizing the amount of money you save in taxes each year. Additionally, knowing the fundamentals of finance and law is essential in order to maximize your savings while being self-employed.

After studying our guide, we strongly believe you have a better comprehension of what it costs to be an independent contractor in Spain. Even if this information may appear overwhelming at first glance, do not worry; SublimeSpain has got your back. We are here to assist you to make the most out of your freelance experience by providing any support or answers that you need.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Wealth Tax in Spain in 2025: What Do You Need to Know

/in

The Spanish wealth tax, or ‘Impuesto sobre el Patrimonio,’ is an annual tax placed on wealthier individuals and families in Spain. While this form of taxation doesn’t necessarily apply to most people, it can significantly impact those with substantial wealth and even deter many from ever moving to this beautiful country. However, strategic and careful planning coupled with professional guidance will help you reduce your wealth tax liability and, ultimately, fulfill your ambitions of living in Spain.

Residency considerations related to wealth tax

An essential distinction in Spain related to the wealth tax is between residents and non-residents. At the same time, both residents and non-residents need to pay wealth tax. In general, non-residents will have to pay less than residents.

You are a resident in Spain for tax purposes if you spend more than 183 days per year in Spain (6 months). On the other side, only spending 182 days or fewer in the country will classify you as a non-resident for tax purposes in Spain. In this way, having a residency permit does not automatically make you a tax resident in Spain.

Non-residents in Spain and wealth tax

If you’re living in Spain as a non-resident for tax purposes, you’ll only be taxed on your assets within the country that is valued at over €700,000. This means that if all the rest of your possessions are located outside of Spain, they are not subject to wealth tax. Situations, where you will be a non-resident and have to pay wealth tax, are:

  • When you are a married couple, you can claim an allowance of €1,400,000 against all included joint assets.
  • If you inherit wealth above €700,000 from Spain, you will have to pay inheritance tax, and you will have to start paying wealth tax.
  • In general, when you have a double nationality, you will not have to pay wealth tax over all your assets when you are located abroad for more than 183 days of the year.

Exemptions for non-resident wealth tax in Spain

For non-residents, there is only an individual deduction of €700,000 on the Spanish wealth tax.

Residents in Spain and Wealth tax

If you are living in Spain as a resident for tax purposes, you will be taxed on your worldwide assets that are valued at over €700.000. This means that on top of your assets located in Spain, the value of all your assets will be included for wealth taxation purposes in Spain, which can lead to a significant overall tax increase. Situations where you will have to start paying wealth tax as a tax resident are:

Exemptions for tax residents in Spain

There is a range of exemptions, and you can also claim a personal tax-free allowance that varies based on the region you live. Some exemptions include:

  • Individual deductions on the national level are €700,000. However, autonomous regions can have a different rate. For example, the deduction in Catalonia is only €500,000.
  • Married couples are entitled to individual deductions on their share of the main home owned, provided joint name ownership.
  • You can get an allowance of up to €300,000 against the value of your primary home.

Therefore, in some cases, the homeownership and individual deductions combined allow married couples to have a total tax-free allowance of up to €2,000,000.

Bear in mind that tax treaties may be enacted with other countries if taxed elsewhere. For example, double taxation treaties are in place with the United States, Canada, and various countries throughout Europe.

Wealth Tax in Spain

Exact percentages of wealth tax in Spain

Wealth tax in Spain is a progressive tax in Spain. The more value your assets have, the more you will pay. The different autonomous regions have various wealth taxes in place, and some don’t have any. In general, wealth tax in Spain is between 0.2% and 2.5%. Below is more information.

The national progressive wealth tax is:

The national wealth tax in Spain is for non-residents and residents who reside in an autonomous region that has not set a wealth tax rate. Wealth tax rates for non-residents have increased since previous years and range anywhere between 0.2% and 3.5%. The top percentage bracket starts at around 10 million euros.Rates and wealth tax in Spain for 2025

 

The autonomous regions have different wealth tax between:

Spanish residents are taxed based on their fiscal residency location within the country. While the percentages listed for non-residents are also the national standard for residents, some Spanish Autonomous Regions have set their percentages and tax brackets.

Wealth tax in Spain by regions

Wealth tax in Spain by regions

Avoiding wealth tax in Spain

There are ways you might be able to “avoid” Spanish wealth tax. However, they do come with some caution. They need to be correctly and legally executed for the assets to be exempt.

1. Bonds for Life Assurance

When the policyholder of the life assurance bonds, has waived his right to redemption, and an irrevocable beneficiary has been named. The policyholder can’t exercise the right of redemption.

When the policyholder can’t access the assets, it’s not part of its assets, and therefore, they don’t have to pay wealth tax. According to Spanish courts, the minimum period of waiving rights through the policy is three years (V2516-17, V3070-17, V0993-18).

2. Pensions

In Spain, pensions and their assets are not subject to wealth tax. The person receiving the pension can’t use it, so it’s not considered part of their assets.

3. Shareholding

Shareholders in companies with the following characteristics:

  • The firm is a trading business.
  • There is ownership of at least 5% of the company’s share capital or 20%, excluding shares held by a spouse or other family members.
  • You manage the firm’s operations.
  • You receive a wage for these jobs at least half of your total net earnings.

4. Giving money away

By giving money away, you can take it out of your estate. Often it is given to children or grandchildren to avoid estate taxation.

5. Share money between your spouse

When you transfer assets to your spouse, you can take them out of your estate.

6. Other potentially exempt assets

Household effects, businesses meeting certain standards, intellectual property rights, and business assets that are used for the taxpayer’s major source of income are all examples of special classes that could be considered exemptions.

Of course, you should always seek expert advice before taking significant steps like those mentioned above. Always keep in mind that the rules of taxation change over time, so make sure you check them frequently.

Wealth tax Spain

Key assets included in the Spanish Wealth tax

There is a range of specified inclusions to the Spanish wealth tax. While there may be some things that require special clarification. These are the essential items to consider that are covered under the Spanish wealth tax:

  • Real estate properties
  • Artwork and antiquities
  • Vehicles, boats, planes, etc.
  • Insurances, deposits, and temporary income
  • Luxury items – e.g. expensive jewellery, expensive coats, racing cars

Key assets exempted from the wealth tax in Spain

  • Primary home in Spain (up to 300,000 EURO)
  • General household contents (except any items listed above)
  • Pension rights
  • A range of small business assets and family company holdings

Other deductibles include any loans taken out on the condition that they weren’t used to invest in any of the assets considered exempt from the wealth tax.

Wealth tax and the 60% Rule

Spanish residents have a rule that stipulates an individual’s cumulative wealth and income tax cannot exceed 60% of their total taxable income.

So wealth tax + income tax cannot be higher than 60% of your taxable income.

For example, if an individual has a taxable income of 100,000 Euros (savings or general), then their wealth tax + income tax cannot exceed 60,000 Euros.

However, it’s essential to remember that you must pay a 20% minimum of the total original wealth tax calculation. So you will never be fully exempt from wealth tax. In this way, it is wise to take as little income as possible.

The payment of the wealth tax

Provided you have any wealth tax liabilities, you’re required to complete the wealth tax forms at the end of each year (31st of December), with the final amount payable between May and June.

It is also determined if you are a non-resident or resident.

For married couples considering filing joint income tax returns, you’ll need to calculate your wealth tax on an individual basis and then add it together with your total income tax due as a couple.

 

Tax rates

Professional advisory on wealth tax

Need assistance with Spanish taxation? Reach out to our team of Spanish wealth tax experts for relevant guidance, meticulous planning, and filing management. We will handle your case strictly confidential and get you a second opinion. You can contact us at contact@SublimeSpain.com.

At SublimeSpain, we’ll work closely with you to provide a custom service specifically based on your needs. Not only do we have a wealth of experience with tax strategies and tax planning solutions, but we also have a verified track record navigating the legal and tax system for expatriates and foreign investors.

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.

How Much Does It Cost to Maintain a Property in Spain?

/in

Are you considering investing in a property in Spain and wondering how much it will cost to maintain a property in Spain? If so, the first step is to calculate whether or not you can afford it!

Maintenance costs and other expenses such as utilities are an important part of budgeting for any property. But what “real” cost should you expect if buying a house or apartment on the Mediterranean coast, or perhaps somewhere inland? Read on to discover how much it will cost to maintain life in the land of paella and sangria.

What are the costs of owning a house in Spain?

The cost to maintain a property in Spain can change depending on various factors. These include the residence’s size, whether you are solely responsible for its upkeep or contract specialists to handle it instead.

To give you an idea of what annual expenses to anticipate when owning a property in Spain, here is an overview of associated charges and fees:

cost to maintain a property in Spain
Spanish currency banknotes and coins

IBI Tax

Owning a property in Spain is an investment that comes with financial requirements, regardless of your residency. Most notably, IBI tax (Impuesto sobre Bienes Inmuebles) must be paid to the local Town Hall each year. It is the equivalent of “Council Tax” for those living in the United Kingdom. This fee covers expenses including waste collection services and infrastructure upkeep. Missing or late payments of annual tax can lead to a hefty financial penalty. Hence, it’s important for all foreign investors and permanent Spanish residents alike to prioritize their IBI taxes on time.

Depending on your location, you can either make this pay annual the tax online or in-person at your local Town Hall. Tax rates for IBI vary by region and are based on the “Valor Catastral” of each property. This means that where you live will affect how much you pay.

To give you an idea of the IBI cost while living in Barcelona, it’s typically 0.6% of your apartment’s value. For example, a two-bedroom home on the Costa Del Sol might be around €400 per year to pay tax. Instead, a luxury villa located in Marbella could range from €1500 – €2000 each year depending on its worth and area.

Non-Resident Property Tax in Spain

IRNR Non-resident income tax (Impuesto Sobre la Renta de No Residentes in Spanish), is a yearly requirement for non-residents living abroad who own real estate. Even if you don’t have any additional sources of income based in Spain and do not rent out your property, as a non-resident property owner this obligation applies to you. This property tax is calculated according to the worth of your assets. Every year, the local town hall issues an IBI receipt that informs you of the cadastral value upon which the IRNR will be based.

Residents’ Tax

IRPF Personal Income Tax (or “Impuesto Sobre la Renta de Personas Físicas” in Spanish) is a direct tax applied to one’s total yearly income for those living in Spain.

This form of taxation applies to any worldwide earnings acquired through employment and self-employment. The taxable amount is determined by subtracting all expenses deemed allowable under Spanish law from your overall global revenue. When filing your annual Spanish income tax return, you can combine rental income with other general sources of income as a resident.

Community Fees/Costs/Taxes for Property Owners in Spain

Along with the taxes outlined above, owning a property in Spain also requires additional administrative and maintenance payments. These can vary widely but might include fees for communal spaces such as playgrounds or tennis courts, annual bank account costs, insurance company expenses, garbage disposal charges and utility bills. All of these must be taken into consideration before making a purchase.

State Tax

Whether you are a resident or non-resident, the amount of taxation required for your Spanish property depends on whether it is being rented out. If so, then quarterly payments must be made to cover 19% of its rental value. If it is not being utilized as such, a much-reduced rate of 0.2% will apply when filing yearly State Tax in Spain.

Utility bills

When it comes to the cost of maintaining a property in Spain, energy costs are an essential factor. Utility bills include water and electricity consumption. The exact monthly utility bills vary depending on the size and occupancy status of your home. However, be aware that higher charges will likely apply if you decide to rent out the premises.

To ensure your bills are paid on schedule, it is essential to establish a Spanish bank account as foreign accounts are not accepted by utility companies in Spain. Although your property may be empty, you will still need to keep up with monthly bills in order to maintain ownership of a home in Spain. Even if you do not stay in the property year-round, utility companies will still expect payment via direct bank transfer. To prevent service disconnection while your home is vacant, it’s essential to maintain sufficient funds in your account at all times. Reconnecting utilities after a lapse can prove time-consuming and costly – so make sure there are no surprises by making timely payments.

Insurance Company Payments

Purchasing a property in Spain necessitates the acquisition of both building and contents insurance, an additional cost to factor into your budget. Home insurance premiums depend on the size of your house and any attached swimming pools, as well as their age and condition. Your mortgage offer often requires that you furnish proof of adequate coverage for their loan security. You can expect to spend approximately 0.05% of your house’s purchase price on yearly premiums. For instance, prices generally range from €250-350 annually near Costa Del Sol. The property insurance company plays a vital role in safeguarding your dream home and its contents. It helps to minimize risks and protect you from the unpredictable.

Other Charges to Consider

When thinking about prospective costs, take into account the distinctive features of your property. For example, if you are fortunate enough to have a private swimming pool in your home, then heating and maintenance charges should be factored in. If there is an outdoor area that needs tending to or any exterior painting or interior decorating required for a non-new built house. Remember that these expenses must not go unnoticed.

If you want to accurately assess the full costs associated with upkeep and updates, a smart tactic is to draw up a list of all monthly and annual tasks that need attending. That way you can factor in extra fees accordingly and ensure you have the accompanying funds ready.

 

cost to maintain a property in Spain

How much tax do you pay on a house in Spain?

All in all, you can expect to pay the following fees for keeping a property in Spain. However, please bear in mind that these figures are just estimates. They should not replace carrying out your own research for specific requirements of your property:

  • 0.15% Local tax
  • 0.05% National tax
  • 0.05% Insurance
  • 0.1% Utilities (if it is an empty property)
  • 0.3% Community charges
  • 0.1% Property charges

Is it worth buying a property in Spain?

Buying a property in Spain can be a great investment, as the country is one of the most attractive tourist destinations in Europe. From the variety of its landscapes to its lively culture and sunny climate, Spain is certainly an attractive proposition for those considering buying a property overseas.

Cost is also something to factor in when looking at property in Spain. Taxes, insurance, utilities and maintenance need to be considered before making a decision. Overall, though, maintaining a property in Spain can often be quite reasonable. In addition, due to the highly developed infrastructure and numerous local services available there, having an asset in this Mediterranean country can be a very wise choice.

A word from SublimeSpain

There are a number of expenses to consider when maintaining a property in Spain. With the country boasting beautiful beaches, mountains, and culture, it can certainly be worth owning a piece of paradise here. However, upkeep will not be cheap. You must pay taxes and take into account utility bills. Also, you should not underestimate repairs.

If you want to own a property in Spain but don’t want the headache that can come with it, then seeking out expert advice might just be your best option.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Plusvalia Tax: Everything on the Municipal Capital Gains Tax

/in

When you sell a property in Spain, you are liable to pay a tax called Plusvalia. This article discusses what the Plusvalia is, how it’s calculated on the property price, and who needs to pay it.

What is the Plusvalia tax?

The Plusvalia Tax on the Increase in Value of Urban Land (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana, IIVTNU) is a property tax levied by the Spanish government on the increase in value of urban land.

The goal of this tax is to tax the increase in the value of the land, whether there is a property on it or not. Some of this increase in value is due to improvements to the area that the local government has made.

Local property tax

The Plusvalia tax is similar to the capital gains tax; only it is paid to the municipality; in other words, the Plusvalia is the municipal capital gains tax. It is set by the local tax office where the property is located and is based on the value of the land value and the number of years that the seller has owned it.

When do you need to pay Plusvalia tax?

When you sell a property, the municipality has the right to collect the Plusvalia tax from you. The tax is payable when the transfer of ownership of the property is registered with the Land Registry (Registro de la Propiedad).

This can happen when:

  • Selling the property
  • Donating the property
  • Inheriting the property

Whether the property transfer is business-related or not is irrelevant, the municipality will still charge the Plusvalia tax.

How is the municipal capital gains tax paid?

The tax obligation happens when the taxable event is carried out, and the tax needs to be paid at one time.

  • When inheriting, the tax payment is due in 6 months.
  • When selling the property, the tax needs to be paid in 30 days.

You can pay the tax at the local town hall, local tax office, or online.

How is Plusvalia tax calculated?

The amount of Plusvalía tax you have to pay depends on three factors, including:

  • The municipality where the property is located
  • The number of years you have owned the property
  • The base (which is the value increase of the property)

You don’t have to pay the tax when you lose money on the sale of your property.

Base property price

The base value is determined by subtracting the purchase price from the sale price. The taxpayer has two options for the base of the calculation.

  1. Real capital gain: the difference between the purchase price of the land and the selling price.
  2. Nominal capital gain: a base that reflects the real property market. Which means the real capital gain.

If the real capital gain is higher than the nominal capital gain, the Plusvalía tax can be decreased.

The calculation

Base (real or nominal capital gain) * percentage = plusvalia tax

The coefficient depends on the number of years and can be found in the following table.

Plusvalia tax table

 

The table above is an indication and set as a maximum by the government. Depending on the municipality or time you check the table, the coefficient could be lower or higher.

What happens when land and construction are transferred?

When construction is on the land, the construction will be subtracted from the sales price to calculate the capital gain of the land.

Who needs to pay Plusvalia?

Depending on the situation, the person that needs to pay the Plusvalia tax is:

  • The seller: The property seller is responsible for paying the tax; however, the seller can negotiate with the new property owners to pay the tax. In some cases, where the property is sold as part of a company, the company is liable for payment.
  • The buyer: In case the seller is a non-resident in Spain the buyer will have to pay the Plusvalia tax. This is because the seller might leave the country and will never come back to pay the tax.
  • The donee: When it comes to giving, the donee, or recipient of the donation, is responsible for paying capital gains.
  • The beneficiary: In the case of inheritances, it will be the beneficiaries who must pay this municipal tax.

A word from SublimeSpain

We hope you enjoyed this article. We advise you to seek legal counsel or tax advice for more information or specific cases.

If you would like to know more about Spanish property law or if you need assistance with your legal or tax case in Spain, contact us. We are happy to help.

Stamp Duty in Spain When Buying a New Property

/in

Stamp duty in Spain (or Actos Juridicos Documentados, AJD) is a property tax for new property buyers in Spain. It’s worth understanding how it works if you want to avoid paying more taxes than necessary.

When do I need to pay stamp duty?

You need to pay Stamp duty when you purchase a new property, whether it’s a house, an apartment, land or commercial premises.

Stamp duty is mainly charged on notarial instruments and records documenting economic transactions that need to be registered in public registries (such as company, land, and industrial property registries).

Stamp duty is also charged on court, administrative, and certain commercial documents.

When don’t I need to pay stamp duty?

There is no Stamp duty on products where you need to pay transfer taxes or capital duty. These are products such as shares, securities, and resale property.

How much do I need to pay?

The stamp duty rates in Spain vary depending on the type of transaction and the value of the assets involved.

The stamp duty rate is usually between 0.5 % and 1.5 %, depending on where it is situated.

Who pays the stamp duty?

The buyer pays stamp duty, and if a deposit is paid before the sale is completed, it will be taxed at the point of payment.

Are there any other taxes I need to pay when buying property in Spain?

Yes, when you buy a new property, you will also need to pay VAT (IVA in Spanish). This is a tax on the property’s value, which is usually around 10 %.

Does the stamp duty include the notary cost?

No, the notary fees (fixed fee) and legal fees (around 1%) are not included in the stamp duty, and you will need to pay for these separately.

Another fee that is not included in the land registry fee. This is paid when the property is registered in your name and costs around 0.6% of the property’s value.

A word from SublimeSpain

We hope this article gave you a good understanding of the stamp duty in Spain. If you have any more questions, don’t hesitate to contact our team at SublimeSpain. We can help you with buying property, taxation and company formation.

Buying Off-Plan Property in Spain: Permits, Costs, and More

/in

There are some legal permits you need to know about when you are buying off-plan property in Spain. Let’s explore some key areas to help you think about your potential or existing construction project, and the necessary legal requirements and procedures you can expect. Because property buying can be a complex, and this is just an overview. We always recommend getting a professional to assist.

Building permits

A licencia is mandatory before the construction of any building commences. Therefore, it’s validity is essential when buying off-plan property in Spain. Also, the permit must be obtained for any construction work on an existing building in case you want to change the usage, exterior appearance or change the volume. For example, you need a licencia to add a storey for both commercial and residential properties.

Spanish construction permits are categorized into two:

  • Licencia for minor works such as walls, terraces, and barbecues.
  • Licencia for major works such as new buildings, alterations, and demolitions.
Obtaining permits

When it comes to permits for minor works, you are required to request a Licencia de Obra Menor at the local Town Hall. The application typically entails a brief description of the project to be undertaken and the estimated costs.

For major works, you need a Licencia de Obra Mayor that is created by a qualified architect (registered in the Spanish architecture college). The architect identifies a suitable technical architect (aparejador) who usually acts as the site manager of the construction site. The project owner has to have a suitable builder who also signs the application.

Permit applications can be submitted either in person or through a registered to the local alcalde. A receipt is subsequently issued. The processing time for the licence request is typically within two months after the date of submission.

During the processing, a thorough examination has to be done to confirm that the correct information has been provided. Subsequently, details of the request are posted in the town hall. In case you don’t receive a notification within two months, then you will automatically obtain the construction permit, assuming that the project has been approved.

NOTE: All the parties involved in the construction of a project are legally required to carry some obligations and responsibilities. These are detailed in the building act LOE of 5th November 1999 (Ley de Ordenación de la Edificacion).

Taxation

The relevant tax is paid at the end of the construction project. You can expect to pay about 4% to 6% of the overall construction cost.

Buying Off-Plan Property in Spain Permits, Costs, and More

Planning zones

All properties in Spain fall into two categories:

  • Rustic(rural) plots (suelo rustico)

Under the rural land law in Spain, some specially protected land (Suelo no urbanizable protegido) are protected and cannot be developed for residential homes. On the other hand, rural land categorized as Suelo no urbanizable común can be developed for residential houses for private use.

Additionally, there are profound rights and restrictions of a rural plot regarding minimum plot size, maximum building size, floors, and heights, among other factors. All rustic plots in Spain typically have some aesthetic restrictions. In this regard, different planning zone have varying regulations. More often than not, you have to construct a typical regional-style building that is unique to a specific planning zone.

  • Urban plots (suelo urbano)

Suelo urbano refers to serviced plots that typically have access to road, water and electricity, among other infrastructure.  When it comes to urban plots in Spain, different planning zone have varying rules. However, the plot sizes limitation is between 800m2 and 1,500m2.

Avoiding Fines and Other Penalties

In case you are a property deed holder or planning to construct a building in Spain, we highly recommend that you are fully aware of relevant licencia to avoid negative consequences. For example, the relevant authorities are likely to fine you for lack of a proper building permit.

Town hall inspectors regularly check renovations and home improvements. In this regard, you want to ensure your building site is fully licensed.  It’s prudent to register all changes made to your project.

When it comes to hiring the workforce, there are several rule and regulations that apply to foreign construction professionals. Also, certain rules specifically apply to the hiring of foreign workers. Consequently, you want to ensure you abide by the relevant labour laws.

A word from SublimeSpain

When it comes to choosing a contractor, we highly recommend doing thorough checks on a case-by-case basis before executing any type of contract. Also, before applying for a business permit, you must do sufficient due diligence to ensure the construction project complies with the relevant building rules.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommended seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Business Bankruptcy in Spain: Common Questions Answered

/in

What is business bankruptcy in Spain?

Business bankruptcy (concurso de acreedores empresarial) applies to companies that can no longer pay debts. It can lead to:

  • Restructuring: The business continues operating under a payment plan.
  • Liquidation: The company is closed, and assets are sold to repay creditors.

Who can file for business bankruptcy?

  • Company directors are legally required to file for bankruptcy within two months of insolvency to avoid personal liability.
  • Creditors can also force a company into bankruptcy.

What are the types of business bankruptcy?

  1. Pre-bankruptcy (Preconcurso de Acreedores): The company seeks time (up to 4 months) to negotiate with creditors before full bankruptcy is declared.
  2. Voluntary Bankruptcy (Concurso Voluntario): The company voluntarily files for bankruptcy when it cannot meet financial obligations.
  3. Forced Bankruptcy (Concurso Necesario): Creditors request bankruptcy proceedings against the company after 3+ months of non-payment.

What happens to business debts in bankruptcy?

  • If the business is restructured, debts may be renegotiated, reduced, or extended.
  • If the business is liquidated, assets are sold to pay creditors.
  • If debts remain unpaid, they may be written off unless directors are found personally liable.

Can business owners be personally liable for company debts?

  • For limited liability companies (SL, SA): Owners are not personally responsible unless they acted negligently.
  • For sole traders (autónomos): Owners are personally liable for business debts.

How long does business bankruptcy take?

  • Simple cases (small businesses) can take 1-2 years.
  • Larger corporate bankruptcies can take several years, depending on complexity.
  • If fraud, mismanagement, or disputes arise, the process can be delayed significantly.

Can creditors still pursue my business after bankruptcy?

  • No, an automatic stay prevents creditors from taking legal action once bankruptcy is filed.
  • However, secured creditors (e.g., banks with mortgages) may still seize collateral assets if repayment is not made.

What are the alternatives to business bankruptcy?

  • Debt restructuring (Acuerdo Extrajudicial de Pagos): A formal plan to adjust payment terms.
  • Debt refinancing: New financing to consolidate debts and extend repayment.
  • Private creditor agreements: Settlements reached outside of court.
  • Company restructuring (Concurso Express or Refinancing Agreements): A fast-track process to avoid full bankruptcy.

How does business bankruptcy affect future financial activities?

  • Businesses that have gone bankrupt may struggle to obtain financing unless they prove financial recovery.
  • Directors of a bankrupt company may face restrictions on managing new businesses, especially if found personally liable.

Personal Bankruptcy: Common Questions and Answers

/in

What is personal bankruptcy in Spain?

Personal bankruptcy allows individuals to restructure or eliminate debts they cannot repay. It is governed by the Second Chance Law (Ley de Segunda Oportunidad), which provides a legal path to debt relief through restructuring or, in some cases, full debt forgiveness.

Who can file for personal bankruptcy?

Any individual (self-employed or not) who is insolvent can file if they meet these conditions:

  • They cannot meet financial obligations.
  • They have made a reasonable attempt to settle debts (e.g., through negotiations).
  • They are acting in good faith (no fraud or intentional default).

What are the types of personal bankruptcy?

  • Pre-bankruptcy (Preconcurso de Acreedores): The debtor informs the court that they are negotiating with creditors, granting them up to 4 months to reach an agreement before full bankruptcy is declared.
  • Voluntary Bankruptcy (Concurso Voluntario): The debtor initiates bankruptcy proceedings when they can no longer meet financial obligations.
  • Forced Bankruptcy (Concurso Necesario): Creditors request bankruptcy proceedings against a debtor who has not paid debts for more than 3 months.

What happens to personal debts in bankruptcy?

  • Debts can be restructured through a repayment plan.
  • Under the Second Chance Law, certain debts may be fully forgiven if conditions are met.
  • Public debts (taxes, social security, child support, etc.) generally cannot be discharged.

Can I keep my assets in personal bankruptcy?

If liquidation occurs, assets (including property) may be sold to pay creditors.
Under the Second Chance Law, individuals may keep essential assets (such as their home) if they can continue mortgage payments and meet other legal conditions.

What is the Exoneration of Unsatisfied Liabilities (BEPI)?

The BEPI (Beneficio de Exoneración del Pasivo Insatisfecho) allows eligible individuals to erase unpaid debts after bankruptcy if:

  • They acted in good faith and did not hide assets.
  • They tried to settle debts before filing for bankruptcy.
  • They demonstrate financial hardship.

How long does personal bankruptcy take?

A simplified process under the Second Chance Law takes 6-12 months. If disputes arise or creditors challenge the process, it can take longer.

How does personal bankruptcy affect my credit score?

A bankruptcy record can remain on credit reports for 5-10 years, limiting access to loans and financial products. After BEPI, individuals are legally free from past debts, but lenders may still consider their history when approving credit.

Spanish Liquidation and Bankruptcy: Frequently Asked Questions

/in

What is bankruptcy (concurso de acreedores) in Spain, and how does it work?

Bankruptcy in Spain is a legal process for individuals and businesses that cannot meet their financial obligations. It allows for debt restructuring or liquidation under court supervision. The goal is to reach an agreement with creditors or, if that is not possible, to distribute available assets fairly.

Who can file for bankruptcy in Spain?

Both individuals and businesses can file for bankruptcy if they are insolvent, meaning they are unable to pay their debts as they come due. In some cases, company directors must legally file for bankruptcy within two months of becoming insolvent to avoid personal liability.

What are the different types of bankruptcy in Spain?

  • Voluntary Bankruptcy (Concurso Voluntario): The debtor voluntarily initiates the process upon realizing they can no longer meet financial obligations.
  • Forced Bankruptcy (Concurso Necesario): A creditor or another party forces a debtor into bankruptcy after prolonged non-payment (typically more than three months). This can lead to the debtor losing control over their company.
  • Pre-bankruptcy (Preconcurso de Acreedores): The debtor informs the court that they are negotiating with creditors to prevent full bankruptcy. This process grants a legal period (up to four months) to reach an agreement without official bankruptcy proceedings.

What happens to debts when someone or a business declares bankruptcy?

  • For businesses: Debts can be renegotiated, reduced, or even forgiven as part of a restructuring plan. If liquidation occurs, the company’s assets are sold to repay creditors. If debts remain unpaid after liquidation, they may be written off unless company directors are held personally liable.
  • For individuals: Debt restructuring is possible, and under the Second Chance Law, some debts may be fully forgiven (BEPI). However, certain debts—such as taxes and child support—may not be discharged.

Can I keep my assets if I file for bankruptcy in Spain?

It depends on the case:

  • If liquidation occurs: Most assets, including property and vehicles, may be sold to pay creditors.
  • Under the Second Chance Law: Individuals may be able to keep essential assets, such as a primary residence, if they can continue making mortgage payments and meet legal conditions. However, if the home is deemed excessive for their needs, it may still be sold.

What is the Exoneration of Unsatisfied Liabilities (BEPI), and how does it help individuals?

The BEPI (Beneficio de Exoneración del Pasivo Insatisfecho) allows individuals to have their debts forgiven after bankruptcy if they:

  • Acted in good faith (did not commit fraud or hide assets).
  • Attempted to settle debts before filing (e.g., through a pre-bankruptcy agreement).
  • Meet financial hardship criteria (proving they are unable to repay the debts).

If granted, the BEPI clears most debts, but certain obligations like public debts (taxes, Social Security) may still need to be paid.

How long does the bankruptcy process take in Spain?

  • For individuals: A simplified procedure can take 6-12 months, especially under the Second Chance Law.
  • For businesses: Corporate bankruptcies can take several years, depending on the complexity of creditor negotiations.
  • If fraud, mismanagement, or disputes arise: The process may be significantly delayed.

Can creditors still pursue me after I file for bankruptcy?

No. Once bankruptcy proceedings begin, an automatic stay is imposed, preventing creditors from pursuing legal action or enforcing debts. However, secured creditors (e.g., mortgage lenders) may still be able to recover assets if the debtor fails to meet repayment conditions.

What are the alternatives to bankruptcy for individuals and businesses in Spain?

  • Debt restructuring (Acuerdo Extrajudicial de Pagos): A formal agreement with creditors to modify payment terms, often supervised by a mediator.
  • Debt refinancing: Obtaining new loans to consolidate or extend repayment deadlines.
  • Private agreements with creditors: Informal settlements reached outside of court.
  • Company restructuring (Concurso Express or Refinancing Agreements): Accelerated processes that allow businesses to avoid full bankruptcy and continue operations.

How does bankruptcy affect my credit score and future financial activities in Spain?

  • Credit impact: A bankruptcy record can remain on credit reports for 5 to 10 years, making it difficult to obtain new financing.
  • For individuals under BEPI: While they are legally debt-free, their ability to get credit may still be affected.
  • For businesses: Companies that have gone through bankruptcy may struggle to obtain new loans unless they demonstrate financial recovery and stability.

Invoices in Spain: Types, Formats, Regulations, and More

/in

Invoices in Spain are an important part for Spanish tax authorities to keep control of companies’ taxes payments. They document the income and expenses of a business and play a key role in tax filings. Invoices are also a valuable source of information for businesses. They can help track spending patterns, identify areas where costs can be reduced, and assess the profitability of individual products or services.

Invoices are an essential part of doing business and should be handled with care to ensure that all required information is included. In this article, you will find information about invoice processing in Spain.

What is an invoice?

An invoice is a seller’s record of goods or services sold, the money owed for them, and any additional fees or taxes that must be paid. The Spanish word for the invoice is “factura”.

What should be on the Spanish invoice

If you operate a business in Spain, you must include certain basic information on your invoice, such as:

  • Company name
  • Contact information (address buyer and seller)
  • Tax identification number
  • Unique invoice number
  • Invoice date
  • Date the payment is due and any other payment terms
  • Acceptable forms of payment
  • Description purchased goods and services provided, including price and quantity
  • VAT Amount
  • Total amount

You must show the VAT identification number of your customers if you export goods or services to an EU Member State.

Invoices in Spain: Types, Formats, Regulations, and More

The Simplified invoice

Invoices may be simplified in certain cases (also known as tickets, credit notes, and receipts). Simplified invoices can be created when you are not invoicing a business or entrepreneur, and in the following situations:

When can you use simplified invoices?

Simplified invoices are only used when you aren’t conducting business deals with firms or entrepreneurs. You can only use them with private individuals, and in the following situations:

Amount less than 400 euros: When the amount of the invoice is less than 400 euros, the invoice can be issued in a format that is considered a receipt.

Corrective invoice: Corrective invoices are created when you need to make changes to an invoice previously sent. This type of invoice must be used when the scope or quantity of goods or services is changed, or if prices are modified, additions are made, discounts are applied, taxes change, etc. These invoices must include information about the original invoice and corrections to it.

Companies with the following specific activities: The sum of the invoice does not exceed 3000 Euro (VAT included) and are one of in the following categories:

  • Retail sales and services
  • Sale or services of an ambulance
  • Sale or services at the home of the consumer
  • Services of transportation of people or luggage
  • Clubs, hotels, and restaurant services
  • Telephone services like telephone booths or card use
  • Hairdressers, beauty schools, dry cleaners, and laundries
  • Toll roads, sports facilities, and parking
  • Services related to photographs film rental and development of photographs.

What should be in a simplified Spanish invoice

The simplified invoice should contain the same information as a normal invoice. The difference is that it doesn’t need to be registered with the Spanish revenue authorities.

  • Invoice number/ series
  • Date of issue
  • Invoice date
  • Your tax identification number
  • Description of the goods dispatched or service provided
  • VAT amount
  • Total amount

Your tax identification number

The tax identification number in Spain is a key element for the tax authorities to monitor business tax payments. It is an important requirement. When you create a business in Spain you are required by Spanish legislation to be VAT Registered.

This tax number is called the Número de Identificação Fiscal or NIF in Spanish. This number aids in the tracking of businesses’ purchases and expenses for tax purposes both domestically and internationally.

Spanish VAT legislation

Under Spanish VAT legislation, taxable persons are allowed to deduct their input VAT from their output VAT. They are also allowed to retain any input VAT paid on purchases of goods or services that relate directly to their taxable output.

VAT refunds and tax declarations

Next to this, you can request vat refunds if you are not required to pay VAT in Spain. For example, VAT refunds can be done when you are not registered as a taxable person in Spain. To deduct VAT or VAT refunds, you require to have the invoices you have produced or received.

Electronic invoices to government bodies

If you work for the Spanish government, you must submit an e-invoice. An electronic invoice is the same as a paper invoice, only it is transferred to the client in electronic format.

Minimum retention period

In Spain, you are required to hold invoices for a minimum of 5 years. After this time they can be destroyed or be recycled. You may be required by the tax authorities to send copies of your Spanish invoices to check whether your tax declarations are correct.

A word from SublimeSpain

Businesses must produce invoices for all transactions, and these invoices must include certain information such as the date, the VAT amount, and the total amount. In addition, businesses must retain copies of all invoices for a minimum of 5 years.

At SublimeSpain, we can help you set up an accounting system that will meet Spanish requirements. We can also help you set up your company in Spain and file your Spanish tax declarations. Contact us today to get started.

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.

Spanish Commercial and Mercantile Law: Frequently asked questions

/in

Can I start a company in Spain being an immigrant?

Yes, you can, as long as you have a valid and legal residency in the country. Now, if you intend to own and also work in said company, you will need to have a work permit or visa for self-employment.

What are the requirements needed to start a company?

You will need the following:

  • To have a legal and valid residency in the country
  • To be of legal age (at least 18 years old)
  • To not have any criminal records for the past 5 years
  • To have health insurance in the country
  • To be able to prove to have sufficient resources for board and lodging as well as the necessary investment to start operating
  • That the idea of the company has the capacity of creating jobs and is of economic interest for the country
  • To have the required education and experience for the project
  • To comply with the current regulations on opening requirements on the type of business

What types of companies exist in Spain?

There are 16 types of companies that can be created in Spain, depending on how many partners or investors and the amount of the initial investment, and the responsibilities of the partners. The most common are:

  • Individual or Autonomous – One partner, no initial investment required
  • Civil Society – At least 2 partners, no minimum initial investment established
  • Collective Society – At least 2 partners, no minimum initial investment established
  • Limited Responsibility Society – At least 1 partner, minimum initial investment of 3.000€
  • Anonymous Society – At least 1 partner, minimum initial investment of 60.000€
  • Anonymous Labour Society – At least 2 partners, minimum initial investment of 60.000€
  • Cooperative Society – At least 3 partners, initial investment established by bylaws
  • Professional Society – At least 1 partner, initial investment, according to the social form: limited or anonymous

How do I reserve the name of my company?

You need to obtain the “Negative Certification” of the company name at the Registro Mercantil Central. This is what credits the exclusiveness and non existence of another company with the same name. It can be done in person, by mail or website.

What are the procedures to create a company?

If you meet the previous requirements, you will need to submit at your country’s Consular Office, original and copy of the following documents:

  • 2 copies of the EX-07 application, completed and signed.
  • Copy of Passport with at least 4 months of validity.
  • Proof of job training and professional qualification legally demanded to exercise the profession.
  • Demonstrate your own investment capacity or economic endorsement from a financial institution.
  • Business plan, specifying the company’s nature, characteristics, sources of investment and viability of the project.
  • Payment of residence and work fees.
  • Proof of payment of 60 euros of visa fee.

Where do I get the viability for my business plan?

The viability must be credited by a Professional and competent organization such as:

  • National Federation of Business men and autonomous workers/ Federación Nacional de Asociaciones de Empresarios y Trabajadores Autónomos (ATA)
  • Professional and Autonomous Workers Union / Unión de Profesionales y Trabajadores Autónomos (UPTA)
  • Intersectoral Confederation of Autonomous of the Spanish State / Confederación Intersectorial de Autónomos del Estado Español (CIAE)
  • Professionals and Autonomous Organization / Organización de Profesionales y Autónomos (OPA)
  • Entrepreneurs and Autonomous workers Associations Unión / Unión de Asociaciones de Trabajadores Autónomos y Emprendedores (UATAE).

How can I register a patent in Spain?

First, you need to formally apply at the Spanish Office of Patents and Branding /Oficina Española de Patentes y Marcas (OEPM), the application must contain:

  • Instance addressed to the Director of the Industrial Property Director
  • Description of the invention
  • One or two vindications, they must be clear and concise
  • Drawings or pictures of the described item
  • Summary of the invention

Once applied, you will need to pay the 600€ fees.

Do patents expire?

Yes, they do, for several reasons such as the ending of the concession period, resignation of the owner, lack of annual fees payment or for the no exploitation on the 2 years after the first license is granted.

If your patent expired for lack of payment, you can retrieve it by justifying the lack of payment.

How long does a patent last?

The duration of a patent is 20 years since the moment when the application is submitted. To keep it valid and in force, it is necessary to pay the annual fees from its concession.

I’m an autonomous worker, can I declare myself in bankruptcy?

Yes! As in 2015, you can. First, the debt must be under 5 million euros (5.000.000€), you can’t have any sentencing of crimes related to property, documentary falsity, estate, social security of workers rights in the previous decade.

What happens when a company is declared in bankruptcy?

When a bankruptcy is legally declared, a company enters a “Concurso de Acreedores” or “Insolvency proceedings” to examine whether the bankrupt’s estate can be liquidated with the intention of meeting their obligations.

Payroll in Spain: Everything You Need To Know

/in

This article will look at how Spain’s payroll system works, including the employment laws, registration of employees and paying taxes. Interesting for people that are thinking about starting a company in Spain, putting people on payroll in Spain, or learning more about payroll administration in Spain.

Spain welcomes foreign investment, especially payroll investments in Spain. National and local authorities are always looking to stimulate the Spanish economy. Next to this, because of the high unemployment rate and the cheap cost of living, being present in Spain as a foreign business is also very attractive.

Employment law in Spain

There is high regulation on employment law in Spain. The Labor Standard Act/Employment Act in Spain is strict, and the government inspects regularly. Therefore, as a business operating in Spain, it’s essential to follow proper employment laws and procedures when you hire or fire employees.

Collective bargaining agreements

Sometimes employment contracts are created with collective bargaining agreements known as the ‘Convenio Colectivo’. These compacts set standards for labour conditions such as minimum pay, maximum working hours, and paid holidays, which significantly influenced Spain’s payroll structure.

Collective Company Agreements are made at the company level or national industry levels by the trade unions and employers’ associations. These agreements are legally binding for all companies that have made these agreements.

Often, the labour unions make groups according to the professional group or profession or their corresponding contributions.

Minimum wage

The government sets the country’s minimum wage. Employee’s salary has risen considerably in recent years, reaching €1108 per month (approximately £990, $1250) as of 2020.

Severance pay

Dismissed personnel have an entitlement of 20 days of compensation for each year worked, up to a maximum of 12 monthly payments. This right to severance pay also applies if an employee does not consent to a substantial change in their employment contract or a long-term relocation of their job site.

Payroll in spain

Work hours

Regular working hours in Spain are from 9:00 to 17:30, and workers have entitlement to a break of at least 30 minutes during the day. Workers in Spain are permitted to work a maximum of 80 hours of overtime per year, but in certain industries and situations, there are exceptions to this rule.

Holiday

Employees are entitled to off time on their national holiday. There are ten national holidays in Spain each year and other local holidays that different parts of Spain recognize. A full-time employee gets 22 days of paid vacation time each year, which equals 30 calendar days. They can take it all at once or split it up however they choose by Spain’s labour laws, but at least one vacation period must be two weeks long.

Maternity leave and Paternity leave

Men and women have entitlement to paid leave of 16 weeks when there is a newborn. For twins, the term rises to 18 weeks; it is 20 weeks for triples. There is also an additional two-week period for children with disabilities.

Sick leave in Spain

Standard sick leave in Spain: 1-3 days (3 days) without pay unless the employer agrees to cover, 4-20 days at 60% of the employee contributions base paid by the employer, 21 days or more at 75% paid by Social Security.

Sick leave effective March 11, 2020, the Spanish government has approved an urgent Royal Decree that deems these leaves to be incurred by the state from the first day of absence (75% of the base) so employers will not have to cover them at their expense or not entirely.

Payroll in Spain

Taxation and Spanish Payroll

Taxation rates may vary significantly across regions. In this regard, payroll departments must understand applicable regulations. If you are a foreign company, you should get familiar with the primary taxes in Spain which include: income tax, social security contributions, VAT, and corporate tax.

Taxes in Spain differ across the 17 different regions. Making sure your company’s payroll and HR remains compliant can be a daunting process for local and foreign companies.

Payroll and social security contributions

Tax laws in Spain require employers to withhold tax and social security contributions from employee wages.

Businesses must register every employee’s contract with the social security authorities and the national employment service. They must register workers with the Public Employment Service within ten days after the employee’s commencement date.

The precise taxes primarily depend on taxable monthly payments, and both Spanish employees and employers are required to pay social security contributions. Employers and employees split the tax burden of social security contributions. The employee contribution rate is 6,35 to 6,40 per cent of gross salary, whereas the employer payments are about 31 to 33 per cent of this amount. The funds are channelled into the public insurance system and used for various reasons, including illness, accident, maternity, retirement, and unemployment.

Employee income tax

Employee income tax is progressive in Spain, with rates ranging from 19% to 45%. How much income tax the employee needs to pay depends on yearly earnings and the autonomous region where the taxpayer resides. For instance, the employee income tax rate for people residing in Andalucia is lower than in Madrid.

The following are the current employment income withholding tax brackets:

  • 19%: €0 – €12,450
  • 24%: €12,450 – €20,200
  • 30%: €20,200 – €35,200
  • 37%: €35,200 – €60,000
  • 45%: over €60,000

Employers are responsible for collecting and withholding income tax on behalf of their workers. They must make the payments for the withheld amounts to the treasury by the 20th. Income tax applies to all types of incomes paid in salary, real property, cash on hand, and financial assets. Employers must also complete Form 111, which is titled ‘IRPF Withholdings at Source,’ and submit it to the Ministry of Finance.

Income tax declaration by employees

As previously discussed, when you have employees in Spain, you have a legal obligation to withhold taxable income payable to their employees. The necessary withholdings estimate the final tax due based on the previous final declaration. Companies must pay tax authorities on a monthly or quarterly basis.

Employees must finalise their income declaration in the period after the end of the year and have to pay or receive the difference. The deadline to file your tax return for the previous year is the 30th of June of the next year.

Non-resident employees

In the case of hiring non-residents in Spain, there will be a flat tax rate on income earned. When an employee is not 183 per year in Spain, he is considered a non-resident and will pay a different income tax.

In general, the withholding rate for non-residents is set at 24 percent. However, if you are from the EU or EAA, the withholding tax that applies is 19 per cent.

Payroll in Spain

Registering your business for payroll

There are two ways to register your employees for payroll. You can form a Spanish company and join the Social Security system to administer payroll for workers or register your already foreign company with the social security office. If you would like help with your payroll and registering your business, you can contact us for payroll services.

When you are a foreigner and want to register employees on a company in Spain. The basic steps to get there are:

1. Get yourself an individual Tax ID number

As a foreigner, you will need a NIE number this number. This number is necessary to open bank accounts, work, and start companies in Spain.

2. Get a Fiscal identification number for the company

Your company will need a NIF number. This functions as the VAT number for the company.

3. Register the company on the local Chamber of Commerce (Registro Mercantil)

When forming the company you will need to sign deeds of incorporation, and bylaws at a notary.

4. Register the company for corporate and income tax

The next step is to register the company with the tax office. With this, you will be obligated to pay the required taxes for your business activities.

5. Obtain authorisation to hire employees

Authorisation by the government to hire employees is needed. Your company needs to pass the requirements to have employees, and therefore the government will do a check.

6. Register employees with the social security office

After you have passed the check, you will be able to fill out a form online to register employees with the Social Security office, and put them on the payroll in Spain.

Workers in the country

Payroll Services in Spain

At SublimeSpain, we will help you navigate the taxes in Spain. Our qualified team closely engages with clients to ensure compliance and deliver pay accurately and on time. We manage all aspects of payroll, including benefits, withholdings, and social security payments. Our payroll outsourcing services are ideal to ensure full employment and payroll compliance.

Payroll services we offer are:

  • Spanish Employment Contracts
  • Handling of salary payment
  • Payroll Processing
  • Handling of social security contribution
  • Tax declarations and administration
  • Tax and Labour Law

Expert access

As a business owner or manager, you want to hire a payroll provider with in-depth insight into payroll laws and regulations, including complex payroll tax issues. With us, we will give you this. We know how the Spanish labour law works, and our services are especially essential for companies working in multiple jurisdictions.

Prioritize your core business

Payroll doesn’t have to be a core function of your business in Spain. In this regard, we help business owners devote more time and resources to focus on revenue-generating activities. SublimeSpain effectively takes control of your payroll processing, and thus you can focus more on your core business, especially customer service, sales, and marketing.

Regulatory compliance

Complying with laws and regulations isn’t an option for businesses, especially when foreign governments are involved. As a business owner or manager, you want to avoid running afoul of the law since it can be very costly regardless of the size of your business. At SublimeSpain, we ensure your company is continually on top of all relevant labour, tax, immigration, and business laws.

It’s worth mentioning that legal and compliance requirements about payroll can be very complex and daunting, especially when operating internationally. By outsourcing payroll to SublimeSpain, you assure that payroll tasks are handled effectively by a qualified team knowledgeable about local, regional, and national laws and regulations.

SublimeSpain takes pride in helping businesses in Spain avoid penalties and unnecessary audits triggered by non-compliance. We are continually keeping up with changing payroll laws in Spain.

Contact SublimeSpain

Stay compliant when it comes to payroll and human resource-related services in Spain. We will ensure your Spanish expansion is seamless and hassle-free if you are a foreign entity. Contact us to learn more about our services or get bespoke quotations for your business. SublimeSpain offers competitive prices, so you don’t have to break the bank!

Payroll Spain

Frequently asked questions

Below you can find some frequently asked questions around payroll in Spain.

How is the management of payroll tax in Spain?

When working in Spain, the payroll tax splits between the employer and the employee. However, the employer holds a certain percentage for these taxes on the salary of its employees. The payroll tax works on a progressive rate (depending on your income level).

What is the payroll tax in Spain?

As with most countries, the Spanish payroll tax comprises several elements that pay for workers and government benefits. There’s a standard deduction on your annual salary form, and others deductions for pension insurance and health insurance, amongst other things.

When is the payment of salaries in Spain?

In general, salary payments are every month. However, it can also be weekly or biweekly, depending on the employment contract. It is best to state the payment date on the employment contract.

How do I employ international people someone in Spain?

First, they need to get a NIE number. After this, you need to fill out a registration form with the Labor Office. The third step is registering the employees with the Social Security system. It’s vital for companies hiring foreign nationals to know how to deal with payroll tax in Spain. If you would like us to help you. Contact us and we will send you a quote.

Do I need to register my company in Spain to have employees in Spain?

No, you can also hire employees in Spain by registering your foreign business with the social security office. We can assist you with this.

What is the CCC number in Spain?

The code is a numerical combination of eleven digits that is assigned to each business in order to make social security payments. The General Social Security Treasury (TGSS) uses this code to identify employers.

What is the NIE number?

The NIE number is the Spanish Tax Identification Number for foreigners. If you’re planning to start a business in Spain, you need it.

Payroll in Spain

Do you have to declare taxes at the end of the year as an employee?

Yes, the name is of the annual declaration of income for employees ‘Declaración de Renta’.

Can I put someone on the payroll in Spain without registering them as an employee?

No, however, if the person you want to recruit in Spain starts working as a self-employed (Autonomo). You can hire them without the need for social security contributions, payroll tax withholding, and contracts. However, they will have to pay social security contributions themselves, and other Autonomo Taxes.

Do I need a NIF if I want to hire employees in Spain?

If your company has economic activities in Spain, you need a NIF number to declare taxes. The NIF number (Número de Identificação Fiscal) for limited companies functions is the VAT Number in Spain. The document provides identification to tax authorities. The number consists of a letter and eight digits. Previously the NIF number was called the CIF number.

What is the SEPE?

The SEPE is the Spanish National Public Employment Service. It is a policy package that includes structures, measures, and actions to advance employment in the entire state.

When a work accident has happened do I need to report it?

Yes, when you have someone on the payroll in Spain and a work injury happen, you must complete paperwork regarding the work injury through an online process known as the Sistema Delt@.

How do I communicate social security documents to the General Treasury of Social Security in Spain?

The RED Direct transmission mode handles the communication. Through this system, companies are required to fulfil their Social Security obligations.

Partner in payroll in spain

A word from SublimeSpain

Payroll in Spain is a tough field without the aid of an expert. It is recommended for foreign businesses with someone on the payroll in Spain to seek professional advice. We help foreign businesses based in Spain to solve their payroll challenges. We offer a complete service from company formation and tax declarations to recruitment. If you are looking for information about payroll in Spain or payroll services then contact us today to find out how we can help.

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.

VAT Spain: Rates, Types, Meaning, Due dates, and FAQ

/in

The VAT rate in Spain is 21%. VAT stands for “Value added tax” and it’s a tax in Spain that has to be paid when selling goods and services. In Spain VAT is called the IVA, which stands for (Impuesto sobre el valor añadido).

In this article, you can find more information about the Spanish VAT. This is beneficial for people that are moving to Spain, or are starting a company in Spain. Topics that will be discussed are the meaning of the VAT, the different kinds of VAT rates, where and when to file the VAT taxes, the VAT number, VAT returns, VAT exemption, and more.

Types of Spanish VAT Rates

There are four different Spanish VAT rates. The regular VAT (21%), the reduced VAT (10%), the super-reduced VAT (4%), and the Zero VAT (0%).

Get taxes done more quickly and efficiently with our tax services in Spain

Learn more

The regular VAT rate in Spain (21% IVA)

The standard Spain VAT rate is 21%, this is applied on regular supplies of goods and services. It is the most common type of rate. The regular Spanish VAT rate applies to products such as:

  • Clothing and footwear
  • Furniture
  • Petroleum products and vehicles
  • Alcoholic beverages and soft drinks
  • Electronics
  • and many others

Vat Rates in Spain

The reduced VAT rate in Spain (10% IVA)

The Reduced VAT rate in Spain is 10%. It is put on products and services which are deemed necessities or cultural beneficiaries. For example, the reduced rate applies to:

  • Agricultural supplies
  • Agricultural products such as cut flowers and plants for food production
  • Cultural or sporting services
  • Mineral water, lemonade, and fruit juice
  • Medical products for veterinary uses
  • Napkins
  • Tampons and panty liners
  • Condoms and other non-medical contraception
  • Passenger transport
  • Hotel and restaurant services
  • Certain printed books, newspapers and magazines.
  • Normal Construction work
  • Cultural events or touristic services are offered by hotels, restaurants or cafes.
  • Entry tickets to museums, parks, monuments, shows
  • Works of art

Spanish Vat Registration

The super-reduced VAT rate in Spain (4% IVA)

The super-reduced VAT rate in Spain is 4%. It is applied to even more basic necessities such as:

  • Bread-making flours
  • Milk, cheese, and eggs
  • Fruits, vegetables
  • Tubers
  • Cereals
  • Pharmaceutical products and medicinal products for human use
  • Social services, such as construction work on social housing
  • Books, newspapers and magazines not containing advertising
  • Domestic care services

Reduced VAT rates

Zero VAT rate in Spain (0% IVA)

Some products are not charged with VAT at all in Spain. However, there are not many. Products with zero vat rate are in the category:

  • Gold coins, ingots and bars
  • Intracommunity and international transport

VAT exceptions for regions

Some regions in Spain have different VAT rules as the ones stated before. These regions are:

  • The Canary Islands
  • Ceuta and Melilla

The Balearic Islands are seen as Spanish territory, they follow the normal IVA rate.

The VAT rate in the Canary Island

The Canary Islands are a Spanish territory in the Atlantic ocean. The VAT in the canary island is called the Canary Island General Indirect Tax (IGIC). The regular IGIC rate is 7%, and the other IGIC rates are 0%, 3%, 9.5%, 15%, and 20%.

This means that in general, you have to pay less VAT when importing goods from other countries to the canary islands. Next to this, when you buy something there, you have to pay less tax than if you bought them anywhere else in Spain.

VAT in Ceuta and Melilla

In Ceuta and Melilla, sales tax is applied instead of VAT. The sales tax is called IPSI (Impuesto sobre la Producción, los Servicios y la Importación or Tax on Production, Services and Imports). The standard rate is between 0.5% and 10%. For example, the fee for importing yachts is 10%.

Spanish VAT number

Due dates to pay VAT in Spain

Companies with a Spanish VAT number are required to make periodic reports on the supplies they have sold and the supplies they have purchased. The VAT return is done on a monthly or quarterly basis. In general, the reporting period in Spain is quarterly. You will have to send the Spanish tax office the information by the 20th of the month following the end of the quarter.

Next to the quarterly VAT return, you also have to do an annual IVA return by the end of January every year in Spain. You can find the calendar with due dates on the website of the Spanish tax authorities:

Exceptions when to file VAT return

While the VAT return dates will be set by the local tax authority where you have registered your vat number, there are some general national guidelines. These are:

  • If the total amount of goods or services is more than 6 million € annually, you will have to file VAT monthly.
  • If the total amount of domestic sales in the year is below 35.000€ and the total amount of intra-community supplies of goods and services in the year is below 15.000€, you can file your VAT yearly

VAT Spain

VAT registration for businesses

When you are starting a new business in Spain, it is required by law to register your business for VAT. Your Spanish company VAT number will be the same as your NIF number.

You will need to contact a Spanish tax office to get this number. Getting a Spanish VAT registration can be complicated, so it is advised to have a corporate lawyer to help you set up your business properly.

When you register for the VAT number, you will be put in the VIES system (VAT Information Exchange System).

The VAT number

Spanish VAT registered numbers (IVA numbers or NIF-VAT numbers) are built as ES + NIF number. An example of the NIF-VAT number is ESB73475571.

The first digit of the NIF-VAT number is always an ES, which stands for Espanol. This third letter is the type of business entity. The following 7 numbers are the ID of your Spanish VAT registered company, and a final character is a control number.

Requesting the Spanish NIF number is necessary to get a NIF-VAT number.

When do you need a VAT number as a business?

There are some rules about when you need a Spanish VAT registration. For example, if you buy and sell cars often, then you will need it. Other scenarios when you need a VAT registration are:

  • When you regularly sell products and services to people in Spain
  • When you perform work for more than one client
  • When you are selling goods to other EU countries from Spain
  • Importing products from other countries
  • Organizing live events, conferences, and other activities in Spain
  • When you are selling products over the internet to Spain
  • When you are holding goods in a warehouse in Spain as stock for resale
  • When you have a commercial interest and try to make a profit
  • When you invest in your business, for instance, personnel or stock
  • When you request more than a symbolical fee

Spanish vat rates

Collecting VAT invoices

To be able to do your vat returns properly. It is essential that you know how much VAT was paid. Make sure you collect the following when you are doing your administration

  • Request an invoice from suppliers and keep it to deduct the VAT paid.
  • Keep a receipt for every purchase made.
  • Keep the invoices you sent to your customers.
  • Keep a copy of all invoices and receipts in case the tax office needs more information or want to audit you.
  • Keep the Spanish VAT number that your suppliers provide.

Keeping track of your invoices is important because you will need to deduct the VAT that you pay on your purchases and add the VAT of your sales. It is a requirement under the Spanish VAT law. Spanish authorities will sometimes audit businesses. If you are not keeping track of your VAT invoices properly, you might get fined or charged more tax than you should.

Spanish VAT rate

Frequently asked questions

Below you can find some frequently asked questions on VAT in Spain.

How much do I have to charge for VAT?

You have to include the VAT on your prices, based on your regional vat rate. You can not ask customers to pay more than the official price with included tax. Is my business VAT exempt?

If you are new in business and are starting out as a micro

When do you charge VAT in Spain?

Spanish law requires you to charge VAT when products are sold or services are carried out. On the invoice that you send your customers, you will need to state the VAT rates that apply to the goods or services.

What is the VAT threshold in Spain?

There is no VAT threshold for traders to be registered in Spain; before the start of taxable transactions, a VAT number is required. Resident and non-resident businesses must register for a VAT number before doing any business. You can register your company easily with our services for company formation in Spain.

Where do you pay VAT in Spain?

You will pay your VAT at the Spanish tax office called Agencia Tributaria (Agencia del impuesto de sociedades). You can log in online and pay the VAT of your company on their website. You can also pay using a bank transfer or at a Spanish bank counter.

How do I pay VAT in Spain?

You will have to pay VAT through a Spanish bank account. This is because Spanish authorities do not accept foreign bank accounts. If you are an individual, only a Spanish bank account will be allowed to make any transaction with the tax office or government agencies in Spain. The name on your bank account must match the name of the company that you are paying for.

If you are looking to open a business bank account in Spain, it is smart to go with a popular bank for foreign companies in Spain.

What VAT penalties are there in Spain?

Penalties are multiplied by a percentage of the VAT owed (so-called “recharges”). The recharges can be a percentage of the tax owed or a multiple thereof.

The six recharges in Spain are:

  • 5% of the VAT is due between 3 months after the due date.
  • 10% if paid between 3 and 6 months after the due date.
  • 15% if paid between 6 and 12 months after the due date.
  • 20% if paid after 12 months after the due date.

If you pay the amounts within the deadline stipulated in the letter with penalties stated, you can reduce them by 25%.

Penalties such as fines and jail time may be imposed by the authorities, especially when the corrections are triggered by an investigation or a Value Added Tax audit.

Is there a VAT refund for travellers in Spain?

When you are travelling in Spain as a non-EU resident, you can request to fill in a Tax-Free form in the shops where you buy your purchases. Then, within three months of purchasing get the form validated by the Spanish Customs.

The digital VAT refund process (DIVA) reduces the time it takes to validate your return. Simply ask the businesses who provide this service for a DIVA form, and submit it yourself at one of Spain’s major ports or airports’ automated terminals.

What other types of sales tax exist in Spain?

Besides VAT, there are several types of sales tax imposed on businesses in Spain. These include:

Impuesto sobre las Transmisiones Patrimoniales Onerosas (ITPO): The ITPO sales tax is applied when selling real estate and means of transport for between €2,000 and €50,000.

Impuesto sobre las Sucesiones y Donaciones (ISD): The ISD sales tax is applied if you inherit or give away property and applies to all estates above €10,000.

Impuesto por la Actividad Económica (IAE): The IAE sales tax is the equivalent of business tax in Spain and must be paid by all businesses registered in the Commercial Registry (Registro Mercantil)

Impuesto sobre el Juego (IJU): The IJU sales tax is applied on any purchase of products related to gambling.

Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana (IIVTNU): The IIVTNU sales tax is a land value tax applied if the property value goes up.

Impuesto sobre Bienes Inmuebles (IBI): The IBI is the equivalent of property tax and is payable by the owners of buildings, although it can also be paid by renters.

Impuesto Sobre Vehículos de Tracción Mecánica (ITV): The ITV is applied when registering a car or motorcycle.

Tasas y otros Ingresos (TIO): A TIO sales tax is applied when applying for business, vehicle or health certificates.

There is also other sales tax you may have to deal with in Spain. If you would like more support for your situation, please contact us at info@SublimeSpain.com.

Where can I find VAT numbers of Spanish VAT registered companies?

Companies must apply for a VAT number to do business in Spain. This is stated by the Spanish “Agencia Tributaria”. You can find these VAT numbers in the official mercantile directive (RMC). If you would like to find a company, you can also have a look at the Spain company register guide, where we explain everything about the vat directive.

What is VAT called in Spain?

VAT is called IVA in Spain, short for “impuesto sobre el valor añadido”. Spanish VAT is also sometimes called “impuesto al valor agregado”, “impuesto sobre el valor menorado y el valor añadido”, and “impuesto sobre el valor añadido”.

Help with your VAT declaration in Spain

Next to taking care of the company formation in Spain,  our tax advisors can help you with your VAT declaration. We pride ourselves of being a one-stop solution for your legal and tax challenges in Spain. Let us take care of your (IVA) forms, VAT refund forms and other tax issues in Spain. Feel free to contact us by emailing info@SublimeSpain.com.

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.

Licencia Urbanística: Building Permits in Spain

/in

Building licenses and permits in Spain are essential if you want to buy a piece of land or property in Spain. Even before buying, it is smart to inform yourself if it is possible to do the work you want to do. In this article, we discuss the “Licencias Urbanísticas”, the licenses necessary for anything related to changing properties in Spain.

What is an Licencia Urbanística?

The Licencia Urbanistica, or “urban planning license,” is the license that authorizes works of urbanization, subdivision, construction, demolition, intervention, change in occupation, and use of public space. In other words, when you change, construct, or convert a piece of land, the Public Administration will oversee that the change is legal and followed.

Licencias Urbanísticas

Types of licenses

Not all urban licenses are the same; some may need more information or details about the project. The types of urbanization licenses in Spain are:

  • Plotting license
  • Building license
  • Licenses for other urban development actions
  • The license of the first occupation
  • Activity license
  • Change of use license
  • Terrace license
  • License for change of ownership

Plotting license (Licencia de parcelación)

It is the one that is requested to split up a property into separate lots (urban and rural). This administrative procedure is utilized to ensure that the land on which one wishes to act meets the requirements the government has set for urbanization.

License for change of ownership (Licencia de cambio de titularidad)

If a company is sold, but the operation does not change, it is not necessary to obtain a new business license; instead, you must report the change of ownership to the Administration.

Change of use license (Licencia de cambio de uso)

This license is necessary for the change of use and occupation of a property. For example, you can not use a property used as a warehouse in the future to host fairs. Each change requires a new license. In addition, this license is required when converting any type of housing to another use (such as changing from residential to business).

Licenses for other urban development actions (Licencias para otras actuaciones urbanísticas)

When projects that do not fall under any of the other categories must be completed, they are required, for example, as part of the installation of a billboard or light.

The license of the first occupation (Licencia de primera ocupación)

The building permit is also known as the cedula de habitabilidad, and it is a document that certifies that a structure satisfies the required standards for habitability. To make a property habitable, basic needs must be fulfilled, such as safe entrances, exterior lighting, waste disposal systems, electrical wiring, etc.

Activity license (Licencia de actividad)

When doing business on a property in Spain, it is essential to show that the company does not pollute and is safe. In a nutshell, this activity will not endanger either the environment or the population. When opening an establishment to the public (such as a restaurant), the owner must have an activity license.

Terrace license (Licencia para terrazas)

The public roadway is host to several terraces of bars, restaurants, and cafeterias. To manage this, the city council requires a license to ensure that the establishment complies with safety and public space rules.

Building license (Licencia de obras de edificación)

For both major and minor construction projects, building permits are required. There are several types of building permits:

  • New construction (Obra Nueva): The development of a building in an unbuilt site implies obtaining permission from the municipal authorities.
  • Expansion (Amplicación): This license will authorize an increase in existing buildings.
  • Modification (Modificación): This license allows for a change in an existing structure’s architectural or structural design without increasing its size.
  • Restoration (Restauración): The authorization to undertake works to save and adapt a structure recognized as a cultural significance gives this license.
  • Demolition (Demolición): This license allows for the complete or partial destruction of one or more present structures.

Building license

Reasons to obtain the Licencia Urbanística

Some examples of acts subject to obtaining a license are:

  • Changing urban plots: The construction or remodeling of a plot of land in an urban environment constitutes an act of use change, implying that we should ask for a license.
  • Demolition of constructions: When you want to destroy a building to build a new one, you must ask for a license.
  • Placement of advertising signs visible from the public road: Even when the sign is hung in your building, we must ask for a license if it can be seen from outside.
  • Modification of the structure of existing buildings: when you make any change to the structure of your building, for example, if you add a new floor or convert a garage into a room, ask for a license.
  • Provisional uses and works: when you change the use of the piece of land e.g. opening a café or an office, or when you work on the land, for example, excavations or earthmoving to build foundations. You need permission.

In some cases, you need multiple licenses, and the combined licenses are known as “urban development permits”.

Obtain the urban planning license

The process to get an urban planning license depends on the municipality and the type of license you need. The Spanish government can be slow with giving out permits, and therefore it is essential to submit a correct application if you don’t want to have any delays.

Piece of land

Obligations of the owner

The property owner must ensure that they have the right to alter it. Following this, the competent Administration (the City Council) will grant the license after confirming that the actions to be taken conform to town planning rules.

It’s necessary to possess the required municipal license to perform property transformations. Furthermore, it must be requested ahead of time before acting.

Costs of the License

It is possible the owner needs to pay a fee for the license, which may or may not depend on the work that they want to carry out. The amounts are defined in the Town Planning Regulations.

Obligations of the government

The city council must follow the procedures outlined in its regulations. As a result, the Administration has no choice but to issue an urban development license in accordance with their rules. If you want to make changes according to the law, they are obligated to give you permission.

Administrative silence or not

When the public Administration doesn’t answer in the specified time, depending on the Administration, there are two ways this can be interpreted. It can be considered an implicit rejection or acceptance.

Building permits

Get help with your building permit

The process of getting a building permit can be difficult and time-consuming, as the government can be slow in issuing permits. Not knowing the type of building permits you need for your project and communicating with the municipal government can be a headache. Our team at SublimeSpain can help you get your building permit with a complete, detailed report that follows the Spanish regulations to the letter.

Our property lawyers will assist you and help you get your plan done, as they have a lot of experience obtaining licenses from the government. They will help you submit the correct application and keep you updated on the progress of the process.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Corporate Tax Spain: Rate, Due Dates, and Laws

/in

Spain has its own set of corporate tax laws and owns corporate tax rates, which are different to other countries. Whether you are already running or still need to form a company in Spain, knowing what corporate income tax you will need to pay is essential. In this article, you can read everything you need to know. Keep in mind that this article is not professional advice and can contain outdated information. Always do your due diligence or contact an accountant in Spain for advice on your specific situation.

Corporate Income Tax Rate in Spain

Generally, the corporate tax rate in Spain is 25%. However, the tax rate can vary depending on the type of company and industry. For instance, if you are an entrepreneur, your newly incorporated company will pay the corporate tax rate at 15% during its first two years of operating.

It’s important to know that, unlike personal income tax, the corporation tax is not based on various income thresholds but is a fixed rate to be paid. In addition to a general corporation tax, companies must pay trade tax and municipal business tax, among others.

Corporate Income Tax (CIT) in Spanish is “Impuesto Sobre Sociedades”. It is the direct tax based on the profits made by companies and legal entities residing in Spain and its territories. The worldwide income and accounting profit are the main factors used to determine the tax base and amount paid by the corporation.

Due dates for corporate income tax in Spain

The corporate income tax filings have to be done after 6 months ending the financial year, within 25 days. So usually between July 1st and July 25th of the following calendar year. There are also two advance payments to be made during the first six months of the company’s tax year and the second before the end of the year.

Types of companies that have to pay corporate tax

Companies that have been required to file corporate income tax and pay corporate tax are:

  • Limited liability entities (such as the SL in  Spain and SA in Spain)
  • Civil companies
  • Foundations
  • Cooperatives
  • Investment funds, pensions, venture capital, etc.
  • Non-resident entities with a permanent establishment
  • Non-resident entities that carry out business activities through a branch or dependent agent in Spain.

Corporate Income Tax Rates exemptions

As it has already been mentioned, while the general corporate tax rate in Spain is 25%, other rates may apply based on the type of company or the sort of business it conducts. Under certain circumstances and requirements, the following entities can be granted a different taxation rate under Spanish law:

  • Listed collective investment institutions inclusive of real estate investment funds (1%)
  • Certain cooperatives fiscally protected (20%)
  • Entities engaging in oil and gas research and activities (30%)
  • Listed corporations for investment in the real estate market (19%)

Spain Corporate Tax Rate

Resident companies pay corporate tax on worldwide income

Companies that reside in Spain are taxed on their worldwide profits. In other words, if a company is resident in Spain, the corporate tax rate will be on all of its income whether that may be from within or outside of the country.

Permanent establishments in Spain

A permanent establishment in Spain is a fixed place through which the business is wholly or partly carried out; an example would be if a company had its own branch in Spain. In other words, it is a workplace from which the company runs its operations.

If a non-resident company has a permanent establishment in Spain, it will pay corporation tax on its income derived from this establishment and profits attributed to the permanent establishment.

However, suppose a permanent establishment in Spain is considered a dependent agent. In that case, the Spanish tax authorities will consider that income as attributed to its parent company and thus not taxable in Spain. In this case, the dependent agent is completely dependent on another company and has complete control. In other words, if the company isn’t legally and economically independent from its principal foreign company, it won’t be taxable in Spain.

Capital gains in other countries

Spanish tax treaties with other countries

If you have business interests in another country, your country has likely signed a double taxation agreement (DTA) or an exchange of information agreement with Spain. These agreements aim to avoid the company being taxed twice on the same income – once by its domestic state and again by another state.

To avoid double taxation on your income or assets, a company must file the taxes correctly. Depending on your specific circumstances, you may be required to submit an income tax return in both countries. But while you may be required to file two tax returns twice, you won’t be charged twice for the same earnings.

Spain has many different tax treaties with other countries. You can find the double taxation agreements signed by Spain (in Spanish) on the website of the Agencia Tributaria.

The tax rate on branch offices in Spain

A branch office is an establishment through which the company performs its activities in Spain. The branch office will be flagged as a corporate entity. With this, the branch office will be treated as a separate legal corporate entity for tax purposes. It needs to be incorporated in Spain and apply for its own taxpayer reference number to declare taxes on the income derived from its activities in Spain.

The branch profits tax is not charged on corporations established in other EE.U.Member States/countries with which Spain has a tax treaty. However, if the branch office carries out activities independently of its parent company, or at least 50% of that income originates in Spain, then it is likely the company needs to pay income tax in Spain. Consult with a professional tax accountant to get more information on your particular situation.

Tax rates for tax havens and tax residents

Resident companies in Spain

Resident companies in Spain must pay capital gains tax in Spain. A resident company must:

  • Be established in compliance with the laws in Spain.
  • Have the company’s headquarters in Spain.
  • Have management and overall control in Spain

Company residence in tax havens

Companies located in tax havens or zero-tax jurisdictions may be deemed Spanish tax residents under the CIT Law. The Spanish tax authorities deem this when

  • Most of their assets are located in Spain.
  • Most of their assets are used in Spain.
  • Most of their activity is undertaken within the Spanish territory.

This may be overcome when the business is incorporated in a tax haven, and the domicile and effective management are there. There are compelling commercial reasons for having the company incorporated in the tax haven.

Corporations owning subsidiaries via intermediary companies

If corporations own subsidiaries or any form of indirect shareholdings in other companies, the tax rule is that they must pay corporate tax on all or part of such profits. The corporate tax rate payable will depend on the percentage held and whether it is a resident or non-resident company.

Corporate tax rates for newly formed companies

Spain corporate tax rate on newly-formed companies

Newly incorporated businesses are taxed at a 15% rate for both the first and following tax periods, regardless of whether they make a profit in either. It’s important to note that there are a few exemptions from this lowered rate, such as:

  • Equity companies: Companies not engaging in business activity
  • National or International groups: Newly created companies that are a part of larger groups or organizations
  • Previous activity: Companies whose business was previously carried out by a related company or individual

What is the taxation period in Spain?

The corporate tax period aligns with the fiscal year of each entity or company and cannot exceed twelve months. The end date of the tax year should be identified in the by-laws of the company in question. If not, the closing date will be considered December 31st of each year. It’s important to note that the corporate income tax is accrued on the final day of the tax period.

In some cases, although the standard fiscal year may not have ended, the tax period is considered to have concluded. Early completion of a tax year will happen in the following situations:

  • In case the entity or company is disbanded.
  • When the legal residence of an entity or company is changed from a Spanish territory to a foreign territory.
  • When the legal classification of an entity or company is changed, it would result in it no longer being subjected to a corporate income tax.
  • If there are modifications or restructuring made to the company or entity that would result in a different corporate income tax rate or the application of a different tax regime.

Companies in Spain: tax rules and tax system

What forms are required?

There are four primary forms used to file corporate tax reports in Spain:

Form 200: This form is used by companies and entities with residence in the Spanish territory subject to standard tax legislation, regardless of the size or activity.

Form 220:  It is very similar to form 220. Only this type of return is mandatory for tax groups. The parent company of the group in question must file this return; however, it’s still required for each entity under this group to file individual returns using form 200.

Form 202: If your corporation had a positive tax result in the previous Form 200 submitted, then you are required to file this additional form. This form is considered an advance payment for your following Form 200 and is made in instalments in the months of April, October, and December. These instalment payments will subsequently be deductible from the amount to be paid of the Corporation Tax.

Form 222: Similar to Form 202, another mandatory payment instalment form for company tax groups.

Regarding forms 202 and 222, please note that if your tax result is negative in July (or the six months following your company’s fiscal year), you’re entitled to a refund of the amounts you prepaid. Additionally, you won’t be required to pay the total amount when your result is positive since you would have already partially paid in advance. All of these forms should be filed electronically.

General CIT rate in Spain

Accounting Requirements

All companies and entities liable for the corporate income tax are also required to maintain all of their accounting books in compliance with the Code of Commerce. Some of the documentation required includes:

  • A journal is used to record all of the operations carried out for activities regarding business development. These must be listed in chronological order.
  • An inventory book and annual account to be opened with a detailed initial balance sheet of the company. This book should be transcribed with all sums and balances and trial balances (the second accounting statement) at a quarterly minimum. The inventory at the end of the year (the third accounting statement) along with the annual accounts (the last accounting statement) is also required to be recorded there annually.
  • Corporate books, including minute books, registered shares in joint-stock companies and limited liability companies, and the registration books of partners involved in limited liability companies.

The last accounting statement contains the annual accounts, including the balance sheet, profit and loss reports, statements of any changes in equity, all cash flow statements, and any notes regarding these financial statements. This last accounting statement is crucial for determining the company or entity’s tax base and all of the subsequent taxes owed.

It’s also imperative that these accounting ledgers are kept for at least six years following the last entry. In situations where the company in question is disbanded, it’s the responsibility of the liquidators to safeguard them for the remainder of the time necessary.

Additional Information: Spanish Tax Groups

There are several advantages to setting up a tax group in Spain. By doing so, multiple companies can apply a special tax consolidation regime for purposes related to the corporate income tax. With the possibility to offset profits and losses throughout the different companies in the group, it’s a beneficial structure that shouldn’t be ignored.

When a group’s parent company holds at least 75% of both the voting rights and the share capital of the subsidiaries it isn’t required to be a resident of the country for tax purposes. Thus, opening the door for multinational groups to utilize this structure.

Frequently asked questions on Corporate income tax in Spain

Frequently asked questions

What are the penalties?

The tax authorities in Spain are rigorous on corporate income tax, and there are severe penalties for late tax filing or undisclosed assets. For example, suppose you neglect to disclose company assets such as accounts, shares, or real estate located overseas. In that case, fines of a minimum of 10.000 euros are subjected to you.

Additionally, assets that are not disclosed within the established time constraints will be considered unreported income. In this case, fines of 150% of the gross tax liability will be enforced.

Which companies and entities are exempt from the Corporate Income Tax?

There are two categories of exemption from the corporate income tax: total exemption and partial exemption.

Entities who can benefit from total CIT exemption include:

  • The State
  • Autonomous communities
  • Local entities and their autonomous bodies
  • Social Security management entities
  • The Bank of Spain

These entities are all granted a total exemption, meaning they are not required to file tax settlement declarations, comply with registration or accounting requirements, and so on.

Some of the entities that are allowed partial exemption are as follows:

  • Non-profit organizations
  • Charitable or public utility entities and institutions
  • Non-governmental organizations (NGOs)
  • Professional or business associations
  • Official chambers
  • Unions
  • Political parties

A partial exemption means that these entities are still obligated to declare the income they obtained in a given financial year.

How are the tax base and corporate income tax calculated?

There are three methods used to determine a company or entity’s taxable income: the direct assessment method, the indirect assessment method, and the objective assessment method.

The direct assessment method applies to most corporations and is determined by evaluating the difference between the revenue and expenses of the entity during a given tax period. Thus, the taxable income is primarily based on the income disclosed in the company’s financial statements. However, in some cases, the income outlined in the accounting books may not be entirely representative of a corporation’s actual contribution capacity. In these situations, various corrections or accounting adjustments will be made by applying the tax principles established outlined in the legislation.

Therefore, the tax base (the amount to which the tax percentage should be applied) is determined through the overall income, expenses, deductions and any adjustments made in a company’s fiscal year.

It’s worth noting that in instances where the resulting tax base is positive, negative tax bases from previous years can be offset.

What other taxes need to be paid by corporations in Spain?

Revenue tax also has to be paid. This VAT tax in Spain will have to be paid quarterly, monthly, and yearly depending on the amount of revenue the company makes.

Is there a tax incentive to incorporate a company in Spain?

While the Canary Islands within Spain are considered a tax haven, Spain is not. However, there are many tax incentives, including the following:

  • There is a lower tax rate for newly formed companies, 15% instead of 25%.
  • Tax credits are available for research and development.
  • There is a tax credit available for technological progress.
  • There is a tax exemption/deduction to protect you from double taxation on both an internal and international level.
  • There is a tax credit for investments in Spanish feature-length film productions.
  • There is a special tax regime for listed real estate companies in Spain that make investments, called SOCIMIs. SOCIMIs enjoy certain tax breaks, including the exemption of both taxes on dividends and CIT.

There are also other tax incentives in Spain. When you work with us, we will make sure you are in compliance with all Spanish laws and regulations and we will reduce your tax rate when possible.

How does the Spain corporate tax rate relate to other countries tax rates?

The corporation tax rate in Spain is 25%. As of writing, above the EU average. The United Kingdom has a corporation tax rate of 19%, while Germany’s corporate income tax rate is 15%. France’s corporate income tax rate is 28.41%, and Ireland’s rate is 12.5%.

Guidance on your corporate income taxes in Spain

The procedures to file corporate income taxes are complex and require a deep understanding of Spanish taxation law. Suppose you’re unsure how to file your company’s taxes or would like advice on the process. We can help. Our team of experienced accountants are ready to assist you through the many challenges of corporation tax.

Get taxes done more quickly and efficiently with our tax services in Spain

Learn more

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.

Property Tax in Spain: Read Our Overview

/in ,

Property tax in Spain is the taxation on real estate, and it is a very common Spanish tax. You will have to pay multiple taxes on your property, and in Spain, all property owners are required to pay these taxes.

You must apply for a NIE (Número de Identificación de Extranjero) to pay these taxes, which is your Spanish tax identification number. When purchasing a home in Spain, you must also have this number. This number identifies you with the Spanish authorities and is required to pay taxes.

Property taxes in Spain for non-residents

You are subject to income tax (including capital gains tax), annual property tax, wealth tax, and stamp duty if you reside in Spain as a non-resident.

Spanish income tax

The income tax for non-residents is limited to income from Spain only. A non-resident is always taxed at a flat 19% when you are from Europe and at 24% if from somewhere else.

When renting out a property in Spain, you will have to pay rental income tax. Non-residents only have to pay income tax over the income they get within Spain only.

Next to this, when you sell your property, you will have to pay capital gains tax on it. You do this via the income tax declaration form as well. In this way, the capital gains tax includes your income tax.

Annual property tax

When you are not renting out your property in Spain and using it for personal uses, you will also have to pay a tax based on the percentage of the value of your property. This is called the IBI tax. Next to the IBI tax, you will have to pay another tax that is the IRNR (Impuestos sobre la Renta de No Residentes).

IBI tax on property in Spain

The “Impuesto sobre Bienes Inmuebles,” or IBI, is the annual property tax in Spanish. The tax rises every year based on inflation. The tax rate for each year is between 0.4 per cent and 1.4 per cent of the property’s cadastral value.

The cadastral value is the Spanish authorities’ value for your property, and your real estate lawyer will be able to provide it. You can object to increases in the cadastral value, so you won’t have to pay more at the Spanish tax office, but you will have to provide good reasons for it.

The municipality’s annual real estate tax is a local property tax, and IBI tax rates increase every year depending on inflation. Remember that the cadastral value for the same size of properties in the same area can vary dramatically.

The IBI also takes into account your cadastral reference number, which identifies your property at the cadastral office, in addition to the assessed value of your home (cadastral value). This may be crucial when purchasing and selling properties because the physical description on the title deed does not match that on paper.

In general, the IBI bill will be sent to you, or you can pay it online. Your local tax office (SUMA) will handle the payments of the IBI.

IRNR tax on property in Spain

This tax is for non-residents that own property in Spain. The government created it under the assumption that non-resident property owners somehow profit from having a holiday home in Spain, even though they don’t rent it out.

Even if the owner does not receive any income or rent from their home, the property is taxed 1.1% or 2% profit on the property’s cadastral value. The amount of taxes varies on whether or not this cadastral value has been updated (1.1%) or not (2%). The tax is reported via the Modelo 210.

Wealth tax

The wealth tax in Spain is an annual tax on the wealth over a certain threshold that you own in Spain. This includes your Spanish property and other assets such as cash, cars, artwork etc.

The tax is levied on the market value of your total assets each year. As this amount increases every year, so will the resulting taxes owed to the Spanish government. You will have to pay wealth tax when your assets in Spain are over 700,000 euros.

Property tax in Spain for non residents

Property taxes for residents

You are subject to income tax, capital gains tax, annual property tax, and wealth tax if you are a resident.

Spanish income tax

When you get a Spanish rental income from your property or properties in Spain. You will of course be obligated to pay tax. Residents of Spain will always have to pay the rental income tax in Spain.

The percentage to pay ranges from 15% for low-income individuals and 30% or 40% for those with high income.

When you rent out your property, you will have to pay taxes on your rental income, and this rental income tax is called notional rental.

Annual property tax

In Spain, there is an annual property tax. The annual property tax is derived from the cadastral value of the property. The tax is called the IBI, “Impuesto sobre Bienes Inmuebles”. The tax increases every year depending on inflation.

The annual tax rate is 0.4 per cent to 1.4 per cent of the property’s cadastral valuation. The yearly tax is set by the municipality and can vary a lot.

Wealth tax

As a resident in Spain, you will have to pay wealth tax on your worldwide assets. The wealth tax is a progressive tax rate.

You will have to pay wealth tax over the value of assets above 700.000 euros, and you don’t have to pay wealth tax on the first 300.000 euros of your home property.

The wealth tax is a tax put by the autonomous regions, and it differs from region to region.

The wealth tax can be complex to pay, especially for foreigners. It is recommended that you hire a Spanish accountant.

property taxes in Spain

Property tax when purchasing new properties

When you purchase a new property in Spain, you will have to pay Stamp tax and VAT.

The Stamp Duty

The stamp duty is a fee that any person or entity that buys a new property needs to pay. The Spanish government sets this fee. The stamp duty is 1.5% of the sale of the property, and they are charged on top of the property price.

VAT

On top of the stamp duty, a 10% value-added tax (IVA in Spanish) is levied on the purchase price. While this seems higher than the tax on resale properties (ITP), this tax can be deducted from other expenses when buying property under a business.

Actos Juridicos Documentados (AJD)

The notorious mortgage tax or AJD (Actos Juridicos Documentados) is one of the taxes you must pay in Spain. This tax is known to vary by region, with a minimum of 1% and a maximum of 1.5%.

The percentage is determined on the basis of the “Responsabilidad Hipotecario,” which means “mortgage responsibility”. The mortgage responsibility is what the bank would owe if the person failed to pay for a period. It is an average of what it costs if they go to court and how much money the bank may need.

This is generally equivalent to between 150 and 200 per cent of the mortgage amount.

property tax in spain

Property tax in Spain when purchasing resale properties

When ​you purchase a resale property in Spain, there are two taxes that you need to pay: the ITP and the AJD

The Impuesto de Transmisiones Patrimoniales (ITP)

The only tax imposed on real estate resale is transfer tax (Impuesto de Transmisiones Patrimoniales/ITP in Spanish). The autonomous regions set ITP. The amount owed is determined on a sliding scale depending on the property’s price. In general, ITP adds between 8% and 11% to the cost of buying a property.

Actos Juridicos Documentados (AJD)

As mentioned before you will have to pay the AJD. which is 1 to 1.5 per cent of the mortgage responsibility.

Property tax Spain

Selling a property in Spain

Because the Spanish Tax Agency (Hacienda) may check your records at the time of property sale, you can’t avoid paying property tax in Spain.

3% deposit for capital gainst tax

The Spanish Tax Authorities will require a 3% deposit within 3 months of the time of sale. The deposit is a guarantee against capital gains tax, income tax, and wealth tax in the previous four years, as well as a guarantee against your tax debt on capital gains. When you have paid your taxes and the 3% was not needed, then you get them back at your next Spanish tax return. At the time of sale, you will have to submit the sales agreement in order to pay this real estate tax.

Capital gains tax

When selling the property, you will have to pay capital gains tax. The capital gains tax for residents is:

  • 19%: for the first 6.000€ obtained as a profit
  • 21%: From 6.000€ to 50.000€
  • 23%: From 50.000€ onwards
  • 26%: From €200.000+

Fee’s

Many of the fee’s associated with the selling of property in Spain, are often paid by the buyer. However, you can expect:

  • Estate agent fee (around 4.5% of the sales price)
  • Bank transfer fee’s
  • Legal and financial fee’s (around 800 euro)

Property tax in Spain

How to pay Spanish property taxes

For a non-resident, the best solution is to pay the tax by direct debit. The bank will provide you with a form authorizing the bank to pay the tax, and a copy of the document will be deposited with the local council. This will ensure that taxes are paid at the right time, just like other utility bills owned by you.

You will receive a letter from the municipality about your local taxes, while your annual income tax should be done on your annual personal income tax return.

The Spanish tax authorities are strict about the late payment of taxes, and any delay will result in penalties or fines, which can be very expensive. Next to this, your property must be adequately registered with the Spanish tax authorities for them not to claim that you are avoiding property taxes as well.

Frequently asked questions

Below you can find some frequently asked questions about Property tax in Spain.ert

Are there any other taxes I might have to deal with when selling or buying a property?

Yes, for example, you might encounter inheritance tax (succession tax), council tax, or other municipal tax. There are many taxes involved with buying and selling property in Spain, and it is advised to hire a tax advisor when dealing with the Spanish tax system.

Can you help me when I want to buy and let properties in Spain?

Yes, we offer a wide range of services for businesses such as company formation, accounting services, and property buying guidance. Get in touch with our team if you need any help or have any questions about buying and letting properties in Spain.

Get help with your property taxes

You need to pay any taxes when owning a property in Spain. If you want to be fully up-to-date with your tax payments, you should hire a Spanish tax advisor. Next to this, it is also recommended to hire a real estate lawyer when buying a property in Spain. If you want our help, you can contact us at contact@SublimeSpain.com.

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.

Common Spanish Modelo’s: Numbers, Meaning, and Uses

/in

If you already have an existing business in Spain, or you already live in Spain, you might be familiar with some the modelo’s. These are forms you have to fill in, and they are mandatory by the Spanish tax authorities. At SublimeSpain, we have professionals specialized in every one of the forms, including the more unique and complicated tax forms.

This article provides more information on the more common forms and information returns. It gives an idea of what you will be dealing with with the Agencia Tributaria. The information is incomplete. Contact us if you would like us to take care of your situation. We offer a variety of services.

Individual and Resident Category

Below you can find some information when you are a non-resident or resident in Spain.

Modelo 30

Form 030. Tax register of parties liable for tax Payments-Declaration of registration, change of address, and variation in personal data in the tax register. Form 030 is provided for parties to register as a fiscal resident with the Tax Office and liable for tax payment, private individuals, or communicate any changes in your data or to indicate an address for notifications if you wish to receive them on another than your fiscal address. Spanish citizens or non-residents can use form 30 to request a tax identification number (NIF).

Modelo 100

Form 100. Personal Income Tax. Annual tax return. The Tax Agency is responsible for issuing form 100 and resident of Spain needs to complete this form as income tax statement within their first year. Also, completing this form means you agree to the Spanish Revenue, and in compliance with HMRC, you are resident in Spain for Spanish tax.

Form 123 (Annual equivalent of M193)

Form 123. Withholdings and payments on account for Personal Income Tax, Corporate Tax, and Non-Resident Income Tax (permanent establishments). Residents of Spain must file form 123 to provide information on certain income from movable capital for tax purposes.

Modelo 145

Form 145 is required by Tax Agency form to record information on personal income tax through which taxpayers inform their payer—including their employer, about their tax and family status. It is also used to define the income tax withholding percentage applied to their wages.

Modelo 151

Form 151. Income Tax Return for individual National Tax Administration Agencies. This form enables online filing, or pre-filing of Income Tax for individuals under the special regime applicable to workers relocated to Spain.

Modelo 210

Form 210. Non-resident imputed income tax and rental tax. Non-residents in Spain are required to pay a percentage of their income and property owned by the state. The current rate for EU members for this tax is 19% and 24% for non-EU members.

Modelo 714

Form 714. Assets or Wealth Tax Declaration of Spain. It includes the necessary information related to the properties owned by the taxpayer and a Statement of Assets by anyone who owns properties that exceed a net value of €700,000. The first seven hundred thousand euros is a nil rate band, and the excess is taxed following a sliding scale. Nationally this scale is 0.2% – 2.5% of net assets.

Modelo 720

Form 720. Declaration of Assets and Rights Held Abroad. All citizens and non-residence of Spain are required to complete form 720 for assets owned in another country. The 720 form is essential, and the information provided is necessary for fraud detection purposes only. Also, it outlines, if any, and what assets are owned and could be subject to significant fines for failure to complete it.

Spanish Modelo's: numbers and information to bare in mind

Business Category

Below you can find some Modelo’s you might need when you are dealing with corporations.

Modelo 111

Form 111. Withholding tax (IRPF) due for the company’s employees and any invoices received withholding tax retained. It is a quarterly requirement to complete general invoices from economic activities incomes, notaries, capital gains from forestry development, and self-employed people (autónomos).

Modelo 115

Form 115. Withholdings and payment on account. Income or yields from the leasing or sub-letting of urban buildings. It is completed and submits quarterly by a self-employed person who rents a property with the withholding included in the invoice.

Modelo 165

Form 165. Informative return of individual certificates issued to partners or participants of newly or recently incorporated organizations. As developed in section 1 of article 69 of the Regulation on Personal Income Tax, it sets out how the new informative tax return must be presented.

Modelo 190

Form 190. Information Return. Withholdings and payment on account. Work income and income from economic activities, prizes, and certain capital gains and income allocations. It must be completed annually, including information about the workers and professionals with their names, surnames, ID, perceptions, and withholdings. It is an informative statement and summary form of withholdings for professionals and workers.

Modelo 200 / 202

Form 200. IS. Tax Return for Consolidated Groups. Corporation tax and non-resident income tax. Payment or refund documents. Businesses have to pay taxes simultaneously to (national treasury and regional treasury) and file self-assessment for corporation tax and non-resident income tax (permanent establishments and organizations under the income allocation system incorporated abroad with terms approved by these in the Spanish territory.

Modelo 232

Form 232. Informative return on related-party transactions and transactions and situations relating to countries or territories classified as tax havens. Obligation to expressly report transactions with related persons or entities and information on trades and conditions relating to countries or territories classified as tax havens.

Modelo 303

Form 303. VAT. Self-assessment. Complete filing of the self-assessment for value-added tax, which should be submitted quarterly if you develop any activity subject to VAT. It can be paid or deducted in certain situations.

Modelo 322

Form 322. VAT. Groups of organizations. Individual form. Monthly self-assessment. A complete filing of the monthly self-assessments for value-added tax corresponding to groups of organizations, a personal record.

Modelo 347

Form 347. Information Return. Annual information return on transactions with third parties. Formalities Information and Assistance. It is required to be completed annually with details on the statement of operations with third parties. Deals worth more than € 3005.06 with the reoccurring party will need to submit this form.

Modelo 349

Form 349. Information Return of intracommunity transactions. It is completed with a disclosure statement. Businesses are required to file the capitulatory return of intracommunity transactions during the corresponding period.

Form 353

Form 353. VAT. Group of entities. It is an aggregated and Monthly self-assessment form that is required to be completed by the parent company on Value Added Tax, through which the payment of the tax debt or refund or the request for compensation is made.

Modelo 368

Tax Form 368. Declaration-settlement of the special VAT regimes applicable to telecommunications, broadcast or television, and electronic services. It is completed quarterly and required for companies dedicated to sales of digital services or registered in a one-stop mini-shop for online sales to EU countries.

Modelo 390

Form 390. VAT. Annual summary tax return. It is required to summarize all transactions related to VAT collected, deducted, and paid by your business during the year. Spanish autónomos and small companies are mandatory to file as there is no payment involved.

Self-Employed Category

Below you can find some Modelo’s you might need when being self-employed.

Modelo 36/37

Forms 036 and 037. Tax register of business persons, professionals, and withholders – Tax register declaration of registration, modification, removal, and simplified tax register declaration. The individuals who should be included in the register for business people, experts, and withholders ought to submit declarations using 036 or 037. A record ought to likewise be offered for adjustments or expulsion from the register.

Modelo 130/131

Form 130. IRPF (Personal Income Tax). Companies and professionals are taxed under the direct evaluation system. Installments. It is mandatory to be filed by individuals who carry out economic activities including agricultural, livestock farming, forestry, and fishery under the direct evaluation system, standard or simplified modality in Personal Income Tax.

Modelo 303 (390)

Form 303. VAT. Self-assessment. It is required to be filed as a VAT return form by all self-employed people in Spain. Every quarter, form 303 is completed to declare their earnings and pay tax.

Real Estate Category

Below you can find some information when you are dealing with real estate in Spain.

Modelo 180

Form 180. Information Return. Withholdings and payment on account. Income from urban building leasing. Annual summary. To be completed yearly as an overview of Personal Income Tax, Corporate Income Tax, and Non-residents Income Tax for incomes acquired from leasing or subletting buildings.

Modelo 211

Form 211. IRNR. It is mandatory and completed for Non-residents’ income tax and withholding in property purchases from non-residents without permanent establishment.

Modelo 296

Form 296. Information Return. Withholdings and payment on account for non-resident income tax (without permanent establishment). The tax form 216 is completed annually by Non-Resident Income Tax (IRNR), which must be paid by companies or individuals who receive some income in Spain, but do not reside in the national territory.

Inheritance Category

Below you can find some information when you are dealing with inheritance in Spain.

Modelo 182

Form 182. Information Return. It contains information about donations and contributions received. Further, it is required to file the right to a deduction in income tax, corporation tax, or non-resident income tax.

Modelo 650

Form 650. Inheritance and Gift Tax. Self-assessment inheritance tax return. If you own assets in Spain, you should plan for your demise, requiring you to file form 650 within 30 and pay inheritance tax. Filing and pre-filing can be done online.

Get support with filling in your Modelo’s in Spain

If you would like us to help you fill in your Modelo’s in Spain, then contact us. We have a team of expert and local tax administration experts ready to assist you. We can take care of it for a fixed fee.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Modelo 720: Meaning, Due Date, Rate, and Penalties

/in

As a Spanish resident, you must use the Modelo 720 to report your overseas financial holdings when the total value of all the specified overseas assets in which you have ownership in, is more than the specified reporting threshold. The form provides three reporting categories including bank accounts, investments and immovable property.

The Modelo 720 is designed to help the tax authorities obtain information regarding the amount of specific type of assets held by Spanish residents outside Spain. Also, information on income, insurance, securities or rights obtained overseas is a substantial part of the declaration. The Modelo 720 is an important document in the Spanish tax system, let’s review its meaning, due date, rate and associated penalties.

Modelo 720 for Spanish residents

Who should use the Modelo 720 form?

The obligation to file Form 720 and declare all financial entities located overseas lies on the owners, beneficiaries, representatives, whether individuals or companies with rights of disposal or full ownership. Spanish tax residents are legally mandated to fill out the 720 tax form, indicating to the relevant tax authorities of their fiscal activity in other nations.

According to the Spanish Tax Office, Modelo 720 applies to all Spanish residents and legal persons who, at any time in the year owned overseas assets worth €50,000 or more. You must report on Modelo 720 all specified foreign holdings, regardless of whether some or all of the foreign holdings was sold before the end of the year.

The €50,000 threshold is based on the cost amount of the asset. When it comes to foreign assets acquired as a gift or inheritance, the cost amount is considered as the fair market value at the time the assets were received.

The components to submit in the Modelo 720 also includes values such as:

  • Homes
  • Shares, stocks, and bonds
  • Trusts
  • Life or disability insurance policies
  • Cryptocurrencies
  • Pension funds

For individuals who have already filed Modelo 720 in the past, you will have to file it again in case the value of an existing asset grew by more than €20,000 or you traded in new assets.

Can I file Modelo 720 electronically?

Form 720 is submitted electronically at the Spanish Tax Agency, so you cannot file it in person. The taxpayer must have an identification with a digital signature (electronic ID or an electronic certificate. Submitting the Modelo 720 with professionals guarantees greater peace of mind.

In case the taxpayer does not have an electronic signature, the individual in charge of submission must be authorized to submit the declaration on behalf of third parties. Consequently, only a registered tax office collaborator or legal professional can submit the form on your behalf.

What is the due date for filing the Modelo 720 form?

The tax form needs to be submitted before 31st March of every year. You can file it after the submission period but you will have to pay a penalty.

Are there any penalties for not declaring foreign income?

There are considerable fines imposed for non-compliance with the Modelo 720, starting at €5,000 and can reach six-figure sums. Therefore, advisers and taxpayers must take great care in their Modelo 720 compliance, and when handling enquiries and disclosures.

Get advice for filling in your Modelo 720

The taxation of income and all gains from foreign interests can be complex. At SublimeSpain, we help our clients ensure compliance, especially concerning issues of residence and tax liability.

The importance of filing Modelo 720 for Spanish residents cannot be overstated. In this regard, maintaining proper records of all foreign holdings is critical to minimizing the time, hassle and potentially the cost of completing this form. Based on Spanish tax laws, errors or omissions, even if accidental, could lead to penalties. As a result, it’s essential that you complete the form correctly and subsequently file it on time.

As a Spanish taxpayer, you want to take advantage of existing treaties and tax laws to mitigate double taxation when dealing with foreign assets. We strongly recommend consulting a professional tax advisor, especially if you are not very familiar with the existing tax regime. We can help you, just fill in the contact form and we will contact you back right away. You can also take a look at our knowledge center to find more relevant information about Spain.

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.

Capital Gains Tax in Spain: Tax Guide When Selling Property

/in

If you live in Spain or are planning on investing in property or other assets within the country, you may eventually encounter the capital gains tax when it comes time to sell the property. It is important that you become acquainted with the tax requirements so you can plan ahead and determine what exemptions are applicable to your situation.

What is Capital Gains Tax in Spain?

The capital gains tax is the main tax in Spain to consider when selling your property and is a fairly straightforward concept. In short, the capital gains tax is paid on the profits earned when you sell an asset such as property or company shares within Spain. For example, if you purchased a property for €200,000 and then resold it for €250,000, the capital gains tax would be applied to the €50,000 – just the profit itself.

The tax itself primarily applies to property (buildings, apartments, houses, and land), company shares, government bonds, and precious metals.

Capital gains tax and Plusvalia tax

When it is time to sell, you will also need to pay the Plusvalia tax. The Plusvalia tax is similar to a capital gains tax, but paid to the municipality instead of the tax office, and is based on the increase of land value. It is typically less than the capital gains tax discussed in this article.

Get taxes done more quickly and efficiently with our tax services in Spain

Learn more

Residency considerations:

Your residency status within Spain is a determining factor for what percentage you’ll be required to pay on your capital gains tax.

Residents

Something very important to note, if you’re living within the country for more than six months out of the year, you will automatically be considered a tax resident in Spain.

The capital gains tax brackets for residents are:

Up to €6000 €6000 to €50,000 €50,000 to €200,000 €200,000+
19% tax 21% tax 23% tax 26% tax

Please note that these percentages only apply to the actual profit earned on the transaction, not the overall selling price.

Non-residents

If you don’t intend to stay in the country for more than six months (183 days) out of the year, then you’ll be classified as a non-resident for tax purposes. For capital gains tax, non-residents are split into two key categories:

Non-residents from elsewhere in the European Union (EU) or European Economic Area (EEA) A fixed 19% rate on all capital gains
Non-residents from countries outside the European Union (EU) or European Economic Area (EEA) A fixed 24% rate on all capital gains

Once again, these rates only apply to the actual difference between your original purchasing price and what you’re selling the property/investment for – just the profits.

3% withholding tax for non-residents

When going through the process of selling your property as a non-resident, there is also another percentage you need to take into consideration. The CGT withholding or retention tax is a levy of 3% of the overall selling price that the buyer must pay to the Spanish tax authorities to cover any capital gains liability.

You can reclaim this money once the authorities are completely satisfied that you have paid all of your capital gains tax. However, this process takes a significant amount of time. Additionally, there have been reported incidents where non-residents have had difficulty reclaiming these funds for various reasons. So it’s imperative to have all of your documentation and paperwork in order to minimize the possibility of this happening.

Tax exemptions:

Exemptions for residents

There are a few different ways you can completely avoid or reduce the capital gains tax on the sale of your property or assets, provided you are a resident.

1. Reductions on assets purchased before 1995

If you are a resident of Spain who acquired property, shares, or other assets before 1995, you can benefit from a capital gains tax reduction. However, there are a few requirements:

  • The property or asset must have been purchased on or before December 31st, 1994.
  • The reduction can only be applied to gains up until January 2006. Meaning, the value increase of your property or asset after this timeframe will still be taxed at the standard rate.
  • You must sell your property or asset for €400,000 or less to be eligible for this tax reduction.

If the asset in question meets all of these requirements, you can benefit from reductions of 11.11% on properties, 25% on company shares, and 14.28% on any other assets.

2. Main home exemption

Residents can avoid the capital gains tax on the sale of their property altogether, provided the money earned from the sale will be reinvested in a new property that will be used as a primary residence. Two key things need to be proven to benefit from this exemption:

  • The property you’re selling must be your habitual residence as well as the property you’re acquiring with the money from the sale.
  • The property for sale or to be purchased must be located within the EU or EEA in order to qualify.

3. Exemptions for taxpayers over 65 years

If you’re a resident who’s 65 years old or over, then you’re not required to pay any capital gains tax on the property sold, even if you have no intention of reinvesting the profits into a new home. The main requirement is that the property you’re selling must have been your primary residence for more than three years.

Additionally, you may be exempt from capital gains tax on the sale of any other property or assets on the condition that you use a portion or all of the profit obtained to invest in a whole of life pension annuity, otherwise known as renta vitalicia, within six months of making the sale. Please note that only the money invested in the pension annuity will be exempt from the tax in this situation.

Exemptions for non-residents

Unfortunately, related to real estate selling, non-residents don’t have many options at their disposal for tax reductions or exemptions.

However, if you’re a resident of another country within the EU or EEA that participates in the tax information exchange agreement with Spain, you could be eligible to claim the main home exemption. Bear in mind that there are a number of requirements, and qualifying as a non-resident can be complicated, so we recommend seeking professional guidance before starting the process of your sale.

Spain does have tax benefits for non-residents such as the Beckham Law.

Changing your tax residency

If you’ve been a tax resident of Spain for at least 10 out of the previous 15 years and intend to leave the country and move elsewhere, you may encounter a Spanish exit tax. While this is a complex concept, we’ll break down the key things you should take into consideration.

  • The exit tax is applied to any unrealised gains made on various assets regardless of what country they are located. Unrealised capital gains are the difference between the purchase value and the market share value.
  • While the circumstances may vary, this exit tax should only be applicable if the value of your shares or assets exceeds €4 million or if your shareholdings are more than 25% and are valued at over €1,000,000.
  • Unrealised capital gains will be taxed under the standard resident thresholds at 19% for up to €6000, 21% for €6000 to €50,000, 23% for €50,000 to €200,000, and 26% for €200,000+.
  • If you happen to move to a country with a tax treaty and information exchange agreement with Spain or leave on a temporary work assignment, the exit tax can be deferred or may not apply. However, we suggest seeking professional advice before proceeding.

Planning ahead

We highly recommend obtaining all invoices, fees, and licences related to your property, as these may be valuable to help you reduce your capital gains tax in Spain when selling property.

If you require any guidance through the legal process of selling your property or assets, you can contact us for tax advice and property law services. We will be ready to assist 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.

Declaracion de Obra Nueva: Meaning and When Needed

/in

Whenever a new building is constructed in Spain, a series of administrative procedures and requirements must be followed, which are crucial to ensure the property is considered legal. The Declaration of a New Construction or the Declaracion de Obra Nueva is one of these key procedures. Our property lawyers can guide you through the whole procedure, below are the most important aspects.

What is the Declaracion de Obra Nueva?

The declaration of new construction is a legal document that contains all of the changes that have been carried out in a property, like the construction of a new building. This information is necessary to be documented in the Spanish property registry.

The deed can be written up before the construction has even finished, which tends to be the case for many development projects where investors want access to important information and plans before financing the project.

There are three main forms of this declaration, all of which need to be signed by a notary:

  1. Obra Nueva Antigua
    This particular form of “declaración de obra nueva” declares an edification, for instance a building, that was made years prior, with or without a license.
  2. Obra Nueva de Rehabilitación
    When updating a building that has already been built but that over the years has become obsolete or unusable.
  3. Obra Nueva in a proper sense
    There are two types, both of which will be the main focus of this blog. This will declare a new recent building or one which is being executed at the moment:

    1. Obra Nueva Terminada
      This is for when the building construction has already been completed.
    2. Obra Nueva en Construcción
      This version is for ongoing construction; however, the owner will need to submit a certificate from the architect to a notary once the construction is finalized.

What documents are needed?

In order to get a notary to sign this deed,a few different documents are required. Take into consideration that this is a global overview of the requirements, and that the documents listed below may not be needed for every form of Declaración de Obra Nueva (it is mainly focused on the Declaración de Obra Nueva Terminada).

  1. Building License from the Town Hall
    This license authorizes the work to be completed based on the building project prepared by your architect. In situations where the owner wants to legalize an old construction, it will also be necessary to establish the age through any of the following documentation: a certificate from the Town Hall, a certificate from a qualified technician/architect, or a notary declaration of the property.
  2. Ten-year Warranty Insurance (Seguro Decenal)
    It’s required for all new residential buildings to obtain this insurance to primarily cover any potential structural damages. However, exceptions can be made if the owner of the property intends on living there themselves.
  3. License of First Occupation (Licencia de Primera Ocupación)
    This is a license issued by the Town Hall, confirming that the construction has been built in accordance with the initial building project presented.
  4. Certificate of Energy Efficiency
    This certificate outlines the key information regarding the energy efficiency of the building. A qualified technician is required to issue this, and it’ll be considered valid for ten years.
  5. Final Works License (Licencia o Certificado Final de Obra)
    This certificate needs to be issued by a qualified technician or architect and essentially confirms that the construction has been completed in accordance with the initial building project. In some instances where the work is ongoing and this license is not yet applicable, the technician or architect needs to issue a certificate describing the works compared to the building project.
  6. The ‘Book’ of the building
    If you intend to sell your property upon completion, you’ll also be required to deposit the Building Book into the Property Registry. This is a detailed description of the entire building and all its functionalities.
  7. Identification of the occupied land portion through its geographic referencing coordinates

What’s the procedure?

Once you’ve obtained all of these documents and completed all the requirements, the next step is to bring them to a notary who will prepare the declaration and sign it in the form of a public deed. This is the official process of the Declaración de Obra Nueva.

The document will essentially declare that there is a residential construction to be built over a pre-existing plot. Once this signature is complete, you’ll then need to take these documents to the Land Registry to finalize a few other land and property details and ensure everything is officially legal.

When is the Declaracion de Obra Nueva needed?

A declaration of new construction is required in the following instances:

  • To declare a new construction is being built over an existing plot/land.
  • To declare an old construction that was previously built over a pre-existing plot/land. This is for houses or structures which were never recorded before.
  • To declare a new extension of a construction over a pre-existing plot/land. This is for homes constructing an additional room or a new floor.
  • To declare a previously built extension of a pre-existing plot/land.
  • To declare both old and new constructions, such as a garage, porch, pool, barbecue area, parking space/covering, etc.

What are the fees?

There are several fees and taxes associated with the process of obtaining the Declaracion de Obra Nueva. Some of the main ones include:

  • The notary fees to prepare the deeds.
  • Land registry fees to inscribe the Declaracion de Obra Nueva in the legal inscription of the land.
  • The Stamp Duty: This is 1’5% of the evaluation of the property.
  • Architect/technician fees and form submission taxes, amongst others, should be considered when budgeting for this process.
  • Additional costs related to legal advice from your lawyer/legal team that will make the optimal and easiest process for you.

It’s important to note that this entire process must be completed prior to applying for a mortgage. This is purely because the bank will be unable to value the property until it legally exists and they have an understanding of the size and other essential details.

Assistance with the Declaracion de Obra Nueva

If you need legal guidance or assistance through the complicated process of obtaining a Declaration of a New Construction deed, then don’t hesitate to get in touch with us. Our team of qualified real estate lawyers at SublimeSpain have a wealth of experience handling the documentation associated with this procedure. Contact us today for a consultation.

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.

Autónomo Tax in Spain: Types, Returns, and Deductions

/in

Every person that is self-employed in Spain is required to pay autónomo tax in Spain. The autónomo tax consists of three parts. The income tax, the vat tax, and social security contributions.

Both income tax and vat tax are paid with a quarterly and annual tax return. Social security contributions are paid monthly. In this article, you will learn about the autónomo tax obligation, autónomo returns, and deductibles.

Every autónomo in Spain is responsible for preparing his/her annual income tax return. It is very common to transfer your annual tax return preparation to an accountant, this way you don’t have to worry about the deadlines and calculation of your autónomo tax in Spain. However, if you decide to prepare your autónomo return, it is important that you know and stays up-to-date with taxes in Spain that apply to you.

Autónomo income tax Spain

When you are a freelancer or self-employed in Spain, your income is taxed at the same rate as other individuals in Spain. The rules of the personal income tax, also apply to you when you are self-employed in Spain. The Agencia Tributaria doesn’t have a different income tax rate for freelancers.

In Spain, there is a resident tax and a non-resident tax. You are a tax resident if you spend more than 183 days in Spain during a year. You are a non-resident for tax purposes if you spend less than 183 days in Spain during a year.

The income tax Spanish tax residents are paying is called the IRPF, it stands for Impuesto Sobre la Renta de las Personas Físicas. In Spain, freelancers are subject to a progressive tax rate. As a result, rates vary depending on how much money is earned.

Remember that different regions of Spain charge taxes at varying rates, so the rates differ across the country. For tax residents, income tax in Spain varies between 19 to 47%, according to income earned.

The income tax Spanish non-residents for tax purposes are paying is called the IRNR, it stands for Impuesto Sobre la Renta de no Residentes.

The amount of tax you have to pay as an autónomo in Spain depends on whether you are considered a tax resident or tax non-resident.

Get taxes done more quickly and efficiently with our tax services in Spain

Learn more

Modelo 130: Quarterly income tax returns

Every quarter, you must submit this form to the Hacienda to declare your gross income and deductible expenses. If positive, small business owners must make a payment on account of their ultimate tax obligation.

Modelo 100: Annual income tax return ‘Renta’

The payments on account taken every three months will be used in calculating the final tax bill on this return. It is due by the 30th of June. Even if you are not required to complete an annual return, it can be useful to do so because then you know your income and expense figures for the full year.

When you have overpaid on your quarterly returns, you can claim a refund by completing this form. When there are additional taxes to be paid, the form is used to declare it.

The tax year in Spain comes to an end on December 31, and all autónomos must submit their Spanish and international earnings by June 30.

VAT taxes in Spain

Autónomo VAT Tax Returns

Just like limited companies when you are an autónomo you also need to pay vat tax. The VAT tax rate in Spain is a fixed tax that you need to pay over the revenue you generate throughout the year. The vat tax is called IVA in Spain.

In Spain, the general VAT rate is 21%. Depending on the type of goods or services, the lower rates are 10%, or 4%, respectively. The VAT applies to all services rendered by freelancers, even if they are performed outside of Spain.

Goods and services that have a lower tax are items such as educational services, artistic endeavours, and some forms of independent writing.

VAT within the European Union

If you engage with business clients outside of Spain but within the EU, you may be eligible for VAT exemption. This is because they pay the VAT at their own country’s rate, not at yours.

If you plan on doing this, you’ll need to register with the Agencia Tributaria to get a tax identification number and submit quarterly reports regarding your intra-community business.

Modelo 303 and 390: Quarterly and Annual VAT returns

Autónomos must submit a quarterly report and pay any outstanding amounts. The quarterly VAT return called Modelo 303 is used for this. When you don’t have anything to declare, you still have to submit it.

It can be carried forward if the quarterly return results in a negative balance. Any refunds that you may receive can be applied to your account at the end of the year.

Autonomo tax in Spain

Social security contributions and benefits for self-employed workers in Spain

If you work as a self-employed individual (Autónomo), you are obligated to pay social security contributions. After you’ve paid into the scheme for 15 years, your contributions will be matched by the government, and you’ll receive a pension as well.

At the same time you register to pay income taxes and VAT, you must also register for social security. To receive your autonomous classification, you must complete a new form indicating your status. This is because several types of employment result in different social security payments, so if your work is considered hazardous, you will have to pay more in contributions. The Spanish Social Security system is comparable to the National Insurance program in the United Kingdom.

Even if you don’t earn anything, you must make payments to avoid being fined 10% of your bill. You will not be eligible to use public health facilities, get a pension or sick pay, or take paid parental leave if you do not make the required payments. Self-employed individuals who take maternity or paternity leave are not required to pay into Social Security, as they are not considered employees. They will however need to have at least 12 monthly payments.

Social security rates for freelancers

In 2021, the starting amount in Spain ranges from €944.40 to €4,070.10. This number is then multiplied by 30.6 per cent, resulting in a monthly payment of at least €288.98 (Autonomous- Employee Contribution). In other words, in 2021 the minimum contribution is 289 euros per month.

The more you pay into the scheme the more you will get. In other words, the amount of social security contributions paid is a factor in determining how much social security benefits are received.

The amount you pay in social security payments each month is calculated using the base salary amount and the multiplier to arrive at it. Social security payments are on a progressive scale, the more you earn, the more you will pay out over time.

Registering for freelancer tax in Spain

To become a freelancer in Spain, you must complete both phases of the procedure. The first step is to register with the tax agency (Agencia Tributaria or Hacienda). To do this, you must fill out Form 030, which is available from the government website.

You’ll need a Spanish national insurance number (An NIE) and a Spanish bank account for the autonomous registration. If you’re not from Europe, you’ll need a work visa or residency permit. You can have an immigration lawyer in Spain help you with this.

Then you must join the autonomous social security system (Regimen Especial de Trabajadores Autonomos or RETA). To enrol in the autonomous social security system (RETA), you must already be a member of the social security system.

You must be a resident of Spain to register for the Agencia Tributaria, so you must complete the Modelo 36 or Modelo 37 forms and submit them to the Hacienda.

The form requires you to state your name, address, and type of business activity. You must indicate where your firm is located and whether you will pay VAT in Spain.

You may want to hire a professional to assist you in becoming an Autónomo or with starting your business. We provide specialized company formation services in Spain, so make sure to get a free quote.

Autonomo in Spain

Costs that are deductible on Spanish Income Tax

Any expense that may be deducted is limited to your economic activity as a freelancer. This implies that you cannot deduct anything from your income taxes that may not be used to generate extra money through your day-to-day activities.

The most important aspect is to properly explain them. If you do not provide sufficient documentation, it will be much more difficult to argue their validity in the future.

You can still use goods and items for personal or family expenses, but they must be marked as such. In this case, these costs should not be deducted from your income tax liabilities.

Freelance tax deductions often apply to business expenses. However, other costs can be deducted from your income if they meet certain guidelines outlined by law.

Utility and supply expenses

If you work as a freelance from home, you may deduct 30% of your utility or supply expenses related to your business. These costs can be deducted from income, but you must be able to prove that these are related to your business.

The costs associated with the work’s location are deductible in the proportion of the m2 impacted and the percentage of ownership.

Food

The expenses of food for the company are deductible for income tax purposes if they are charged to a credit card and paid in a restaurant and catering business. This is the most crucial distinction because if a payment is made in cash, it will not be accepted. In Spain €26,67 per day is deductable, abroad that is €48,08.

Health insurance

The costs of health insurance premiums paid by taxpayers and their spouses or partners, as well as children under the age of 25 who live with them, are deductible to the extent they comply with these limits:

  • € 500 for each individual
  • € 1,500 in the case of disability

Expenses you can deduct entirely

Below you can find some key expenses that can be deducted in full from your income for tax purposes:

  • Your monthly social security payment.
  • Purchases of inventory or stocks made as a result of your company’s activities
  • Supplies (such as pens, toner, and ink cartridges)
  • Costs coming from advisor agencies (accountants, experts, tax advisors, or lawyers).
  • Mail charges
  • Bank charges for business accounts.
  • ICT services (server, website, etc.)
  • Costs for business travelling
  • Any marketing or advertising expense
  • Any expenses associated with retaining personnel, such as wages or educational costs
  • You can also deduct the franchise fee if you have established a franchise.
  • Expenses related to your office (for example rent)

There are more expenses related to your company you can deduct, but it is good to keep in mind that the expenses must be related to your business. You can best check with a tax advisor to see if your expense is deductible from your Autónomo tax in Spain.

It is important to keep the invoices of the expenses, as well as their date and location. You can then adjust these expenses when filing your annual income tax return.

Deductibles on VAT as an autónomo in Spain

The VAT quotas paid in the course of an economic operation are only deductible for supplies, services, or imports that are directly affected by the business activity and justifiable by invoice.

If something is only partially intended for your business, you can deduct a percentage of the VAT. This percentage is determined by your invoice and its related activity.

For example, in case the company buys a car. The company’s VAT obligations are based on the vehicle’s total mileage. If a car is used in your business, you can deduct any repairs, gasoline, tolls/fees, or parking charges at the same rate as your firm’s activities.

These quotas are deductible from VAT on income obtained during the same taxable period. It must be under the name and number of the taxpayer’s registry, as well as having an invoice of payment.

Freelancer tax in Spain

Frequently asked questions

Below you can find some of the most frequently asked questions about deductibles as an autónomo in Spain:

What invoices should I keep?

You must keep any invoice or receipt you receive from your supplier for any purchase. Any expense, such as gas or food, requires a receipt to be deductible.

How long do I have to keep my invoices?

It is required by the Tax Administration’s standards to maintain all invoices and documentation for at least four years. This is the tax statute of limitations, which allows the Treasury to undertake an audit and examine the employer or self-employed individual’s tax records for 4 years after declaration.

What expenses can I deduct?

Taxpayers may only deduct the business expenses they need to carry out their activity, which is exclusively related to it. Expenses that do not benefit your business cannot be deducted.

What is the difference between a Spanish autónomo and a company?

First of all, it is important to understand that there are two different kinds of Spanish companies: the limited liability company (S.L.) and the corporation (S.A.). It may be necessary to consult with a tax advisor in terms of which type of company will best suit your business structure.

Do I need an accountant as an Autonomo?

Yes, it is recommended that you keep your records and use an accountant in Spain to prepare your annual income tax return. It will be more secure and save you time and headaches.

Concluding the autónomo tax Spain

In this article, we have discussed the different taxes, deductions, and documentation in filing your taxes as an autónomo in Spain.

Keep in mind that the deductions must be related to your business, and not for personal use and that you keep your invoices saved securely.

Contact us if you would like help with filing your taxes. Our tax specialists can function as your tax advisor, accountant, bookkeeper, or simply help you file taxes online. We will create a quote tailored to your needs.

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.

Beckham Law Spain for Expats: Benefit, Conditions, Filing

/in

The Beckham law creates opportunities for expats to save money. It is also know as the Special Expats’ Tax Regime (“SETR”) or Régimen Especial para Trabajadores Desplazados. Knowing the rules to take advantage of this law allows you to keep more money in your pocket when filing taxes. In this article, we will discuss what it is, what conditions their are, as well as how to file a tax return under these guidelines.

What is the Beckham law in Spain?

The Royal Decree 687/2005, popularly known as the Beckham Law is a special expats tax regime. It enables foreigners that are approved by the relevant Spanish tax authorities to pay a 24% flat rate for income earned in the country.

Expats who fall under this regime are not treated as tax residents whose worldwide income is taxed as an progressive tax rate of 19% up to 45%.

Normally when you move to Spain to work, you become a tax resident and are subject to the normal rate for Spanish citizens. However, with the Beckham law, instead of being taxed at the resident income tax rate, you can pay it as a non-resident.

Beckham Law Spain

Types of residencies in Spain

To grasp a better understanding of what the Beckham law implies we discuss the different types of residencies and taxes for foreign workers in Spain.

Residents in Spain

A resident in Spain is someone that lives in Spain on a permanent basis. This means that their principal interests are situated in the country, not outside of it.

As mentioned before, there are several conditions that can lead someone to become a tax resident and thus be subject to the flat rate set for Spanish residents:

  • You live in Spain more than 183 days during the tax year (which runs from January 1 through December 31).
  • You live in Spain less than 183 days, but your spouse and children or those of your legal dependents stay outside Spain at least 183 days during the tax year. If you are present in Spain for more than 183 days, but this is not the case with your family members, you will be a resident for tax purposes.
  • Your center of economic interest is situated in Spain. This means that the main part of your economic activities and interests is carried out inside Spain, regardless of your physical presence or activity abroad.

Normal tax implications for residents of Spain

Residents of Spain are subject to the same Spanish income taxes as Spanish citizens, this tax is known as the Spanish Personal Income Tax (PIT), or Impuesto sobre la Renta de las Personas Físicas (IRPF).

This tax is levied on all income and capital gains, whether foreign or domestic. The tax is a progressive tax on income and capital gains with a tax bracket that starts at 19% and goes up to the top marginal rate of 47%.

Beckham tax spain

Non-Residents in Spain

A non-resident in Spain is a person who is not resident in Spain. The law states that you are considered to be a non-resident in Spain if one of the following conditions applies:

  1. You live outside the Spanish territory more than 183 days during the tax year (which runs from January 1 through December 31).
  2. You live in the Spanish territory less than 183 days, but your spouse and children or those of your legal dependents stay outside Spain at least 183 days during the tax year. In this case, those family members are also considered as non-residents.
  3. Your center of economic interest is situated outside Spain. This means that the main part of your economic activities and interests is carried out outside Spain, rather than in a country other than Spain.

Normal tax implications for non-resident of Spain

Non-residents in Spain are only required to pay income tax on their earnings from Spain. It is also known as the Non-resident income tax (NRIT) or Impuesto sobre la Renta de No Residentes (IRNR). In general, the flat tax rate for non-residents is 24%. For citizens from the EU/EAA the rate is 19%. They will be charged a flat and set rate.

Residents with Beckham law tax residence

When you are a resident in Spain, and you get approved for the Beckham law you will be considered as non-resident in Spain. This means that your worldwide income is not subject to Spanish tax, but only what you earn in Spain.In other words,

  • You can spend more then 183 days in Spain without having to pay taxes on your worldwide income.
  • You will only be paying taxes on your income in Spain
  • You won’t pay the progressive tax and instead a flat 24% up to 600.000 Euro. When this is exceeds you will pay a fixed 45%

As you can read, this Spanish income tax law is very attractive to foreign nationals who will need to work more then 183 days in Spain. With the Beckham law in Spain the tax burden can be significantly lowered.

Non-resident-tax

What are the conditions for the Beckham Law?

In order to apply the Beckham Law, the person should not have been a resident in Spain during the 10-year tax period before the year they are settling in the country. Also, the applicant must be moving to Spain for work reasons. For this reason, you are required to have an employment contract where the employer is a Spanish company.

Other criteria that need to be met by expats that want to apply are:

  • To qualify, the applicant must be a first-time resident of Spain.
  • The applicant must have moved to Spain to take up a work contract.
  • Employment responsibilities must be carried out in Spain, but if they are required to perform part of their duties outside of Spain, the proportion of their income derived from these sources cannot exceed 15 percent.
  • Within 6 months of beginning the employment contract, the application must be submitted.
  • The agreement is valid for a total of 6 years.
  • All capital gains made in Spanish territory are taxed at a rate of 35%.

If you wish to be a director in a Spanish company, then you must have equity in no more than 25% of the company.

Applying for the Beckham Law

When it comes to the application process, the application must be submitted within 6 months starting from the date of the inscription in Social Security as an employee for the Spanish company. As a result, applications after the 6 months are promptly declined.

The application process starts by first filling out and sending the Modelo 149, which informs the Spanish tax agency of the intention to benefit from the tax regime. Candidates need a passport, NIE number and Social security number.

Model 151

After applying via the Modelo 149, and getting accepted, the person must then do their tax declarations by filling out and presenting Modelo 151.

Beckham-Spain

Other taxes and the Beckham law

Next to paying lower income tax, other taxes also need to be payed Spain. Below we discuss the taxes and how the Beckham law effects them.

Capital gains

Capital gains are not exempt under the Beckham law. Dividend gains, including profits earned from sales of movable and immovable assets (property), are charged at a fixed rate of 19%. As a non-resident, you are liable to pay income tax in Spain for any capital gains earned from outside Spain. Capital gains earned from outside Spain must be still paid to the corresponding nation per their taxation rules.

Wealth tax

When you fall under the Beckham law you will only have to pay wealth tax on your assets located in Spain. If you would fall under the PIT, then you would have to pay taxes on your worldwide assets.

The wealth tax is a tax payed on the net value of your assets such as real estate, stocks, accounts and life insurance.

Local taxes

A resident under the Beckham Law must pay local taxes. For example when you own property in Spain, you might have to pay local property taxes.

Help from experts paying your income tax

If you are looking to move to Spain, then we can help you with Tax advice in Spain. will help you decide what works for you based on your personal objectives, and current Spanish compliant requirements. If you qualify for the Beckham law, we will guide you through the entire process and describe all the steps you should consider to make more informed decisions.

Where did the Beckham law come from?

British Footballer David Beckham was one of the first foreigners to benefit from the decree, hence the popular name “Beckham Law”. He was taxed as a non-resident when he famously played for Real Madrid in Spain.

The Beckham Law is, without doubt, a significant tax benefit in terms of tax savings. It has benefited a diverse group of people including athletes, foreign entrepreneurs and wealthy expats. Essentially, it enables non-resident foreigners to make significant investments in Spain while being liable to pay less tax than a resident would pay. The special tax regime is ideal for foreigners who become Spanish tax resident because of an assignment to Spain.

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.

Starting a Business in Spain After Brexit for UK Citizens

/in

The UK’s exit from the EU became an eye-opener for businesses, public administrations, and citizens when they understood the various trade barriers this exit would bring to their doorsteps. If you consider starting a business as a UK citizen in Spain, you should be careful with the new rules and regulations you will run into as a non-EU citizen. It is therefore recommended to hire a lawyer that can assist you with the new obstacles in tax, trading, and starting a company formation. This article is intended to provide information about the changes for UK individuals who want to start a company in Spain.

Can I start a business in Spain after Brexit?

You can still start a business in Spain since you don’t need to be a resident to start a business in Spain. If you want to incorporate a new company, our bilingual corporate lawyers can help you with everything. You can read more about our services on our company formation page. Next to this, we have another article that explains the complete process of starting a business in Spain.

SublimeSpain makes your company formation easy, fast, and worry-free

Learn more

What new requirements and taxes are after Brexit in Spain?

At the end of December 2020, new tariffs, duties and compliance’s for UK citizens were implemented. It is important to meet all the necessary standards of imported or exported goods and conform to international legal and trade obligations. Just like the UK, these new policies will help prevent illicit activities and smuggling of products, including foods, disease control, and safety products for Spain and the EU

Moreover, the customs would give an affirmation that will aid the governments in collecting information about the specific products after importing or before exporting every product. The customs declaration will have information on the type of goods, value, shipment method, tariffs or duties paid. Likewise, different checks and licenses might be required and applicable for importing goods, such as plants, animals, animal origin products, agro-food products, pharmaceuticals, chemicals, alcohol, tobacco, etc. You can find more about these policies here.

Companies should also make a point to check the personal data shared between UK and EU businesses and make sure they comply with the General Data Protection Regulation.

Another one is that if you sell digital goods online to Spanish customers, they should be recorded either in the Spanish VAT system or an EU VAT MOSS system.

Our corporate lawyer is ready to assist you with the forms and regulations you will have to go through. Just contact us, and we will be happy to help you with your situation.

Popular companies you can register in Spain

Depending on the type of company and activities you want to start in Spain. Foreign investors must register either the limited liability company which is privately held called the SL (Sociedad Limitada) or the public limited company called the SA (Sociedad Anónima). There are many differences between the S.L. and S.A. For example, the SL limited liability company requires an investment of 3.000 euros and can have 1 to 50 partners, the Sociedad Anónima a minimum of 60.102 euros and can have an unlimited amount of partners. Both have different aspects that make them interesting for individuals and organisations.

At SublimeSpain, we can provide financial and legal assistance and support you through the company incorporation process, as well as the bookkeeping and accounting. Contact one of our lawyers to get a free quote.

Living in Spain after Brexit

If you want to start a business in Spain, and want to live in Spain, then you need to apply for a visa. When you are starting a business, most likely this will be applying for a Business Visa or Self Employed Work Visa. We suggest contacting us for consultation with our immigration lawyer. Additionally, if you are willing to invest about 500.000€ in the Spanish economy, including real estate or qualified financial investments, you can apply for a Golden Visa in Spain. Having a work permit makes it eligible for you and your family members to reside in Spain as well. You can also use in the Beckham law to live in Spain but as a non-resident.

Living in Spain with the Beckham Law

Individuals that will be working in Spain can also apply to the Beckham rule if they are qualified. It licenses you to live in Spain but as a non-resident. This option comes with a unique tax regime at a fixed rate of 24 per cent of your Spanish employment income, unlike the progressive tax rates applicable to Spanish residents. We can help you with your application for the Beckham rule, take care of your tax declarations, and provide you with practical advice.

Living in Spain for ex-pats that arrived before Brexit

British ex-pats that were already living in Spain before the Brexit can register as a resident in Spain at the Immigration Office (Foreigners Office). As a resident, you will be able to get health care, a driver’s license and enjoy other resident perks. If you would like assistance with this, our lawyers can help.

Living in Spain ex-pats that arrived after Brexit

British ex-pats that want to move after Brexit to Spain will need to meet the normal Spanish immigration requirements for countries outside of the Schengen territory. This also means that UK Nationals that want to visit Spain are subjected to the following rule: you can stay 90 days in any 180-day period within the Schengen area. Just like the Spanish immigration requirements, this rule applies to countries outside the EU If you would like to know more about living in Spain for UK nationals, we would suggest looking at the official information from the UK government.

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.

Buying Real Estate in Spain After Brexit for UK Citizens

/in

Brexit is not a barrier for UK residents looking to buy real estate in Spain. However, the legal environment regarding investing in Spain after Brexit has, without a doubt, changed. Let’s discuss the ins and outs of buying real estate in Spain after Brexit, including legalities, pitfalls to avoid, costs and the process itself.

Moving to Spain in 2021

Owning a home in Spain is a dream for many, and the EU nation makes a perfect location for real estate investors. After Brexit, British tourists, including those with holiday homes and other real estate in Spain, can no longer visit and leave as they please. They can only stay in the country for a total of 90 days in any 180 days, after which they need a visa in case they wish to stay longer.

Post-Brexit, UK nationals are required to apply for a visa to show that they have the right to reside and work in Spain. You don’t need to be a resident to purchase a property. However, on a practical level, you need a bank account, and for that, you must have a permanent address and thus a visa.

For British nationals seeking employment when they move to Spain, you can expect a working visa procedure for Spanish looking to work in the UK. As much as UK nationals cannot work in Spain without a work permit, they can own real estate.

If you are a retiree looking to move to Spain, the visa process is simple. Similarly, it is straightforward for those looking to retire in Spain who don’t need to work.

When it comes to property prices, initial prices for real estate are expected to become costlier for British nationals. Also, investors can expect limited mortgage availability.

Applying for Spanish Residency

Many British nationals who moved to Spain before Brexit have to apply for a permanent Spanish residence to legitimize their stay. Consequently, you cannot arrive in Spain as a tourist and apply for Spanish residency (unless you apply for the Golden visa). British citizens outside Spain who wish to apply for residency have to do so through the Spanish consulate in the UK.

As non-EU citizens, British citizens who wish to purchase real estate are permitted to apply for Spanish Golden Visa residency from 1 January 2021. More investors are taking advantage of the Golden Visa route to Spanish residency. SublimeSpain offers valuable advice regarding applying for Spanish residency from the UK and can outline the full procedure you need to go through.

Conditions for Spanish Golden Visa

Upon getting a Golden Visa, you and your immediate family members are given residence permits that can be renewed indefinitely, provided you maintain the investment. One of the best ways to acquire a Spanish Golden Visa is by buying real estate. However, you must purchase property worth at least €500,000.

Alternatively, investing in shares in a Spanish company or bank deposits of at least €1 million makes you eligible for Spain Golden Visa. A third option is investing in Spanish public debt (at least €2 million). One of the profound benefits of the Spanish Golden Visa is that there is no minimum stay requirement. Also, you can apply for permanent residence in five years and citizenship and an EU passport in ten years.

Relevant documents when buying property in Spain

British nationals seeking to buy properties in Spain should bear in mind that the entire process can be quite lengthy and time-consuming. During the application, you are expected to present several documents including documents with the details of the property they intend to purchase.

Also, British nationals are required to provide information regarding the present owner of the property, for example, their personal information. As is the case with many other countries, the real estate buyer must present his personal history, current residence, and means of income.

Are you looking to buy real estate in Spain?

When buying real estate in Spain, we highly recommend doing your own research on your chosen market or getting an expert involved. In general, British nationals seeking to buy real estate in Spain after Brexit should hire the services of experts that are well-grounded in the existing laws. The importance of sound legal and tax advice cannot be overstated.

At SublimeSpain, we are here to support you every step of the way and connect you to reputable estate agencies and developers. Also, we will help you navigate the often complex channel of paperwork and utmost due diligence.

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.

Costs Buying Property in Spain: Taxes and Services

/in ,

Spain has no shortage of excellent property options for commercial and residential purposes. Spanish property prices are relatively lower than in many neighbouring countries and capital cities. Let’s explore the ins and outs of costs and fees for buying property in Spain.

Can foreigners buy property in Spain?

Having property in Spain is an alluring prospect for many foreigners, both EU nationals and Non-EU nationals. Foreigners can buy property in Spain and take out a Spanish mortgage, even if they are non-resident. That being said, varying tax implications may apply between resident and non-resident buyers in Spain.

Buying property as a foreigner might not be the most straightforward process, but Spain is very welcoming for foreign investors. Before the purchase, you must have a NIE number (financial number).

Golden visa program

Under the Spanish Golden Visa program, foreigners can get a residency visa after investing more than 500,000 EURO in Spanish properties. A Golden Visa is a viable option for investors from outside the EU.

Get the help of a Property Lawyer in Spain

Learn more

Costs you can expect when buying property in Spain

It’s essential to be aware of the Spanish housing market quirks, regulations and taxes in Spain before purchasing a commercial or residential property. As a buyer, it’s your responsibility to pay for all costs and taxes associated with buying a property.

Property transfer tax

When buying Spanish property, the property transfer tax is at 6–10% for existing properties or 10% for new properties VAT (or IVA) fees are only 10% for new properties.

Rental income tax

The applicable tax should be submitted and paid to the local Spanish tax office regarding rental income. The income tax rate is 19% as of 2021 for the EU. However, You can deduct the relevant expenses (including mortgage interest) from the gross rental income. In our article about rental income tax in Spain, you can find more information about the rates, deductibles and process.

Insurance costs

Property insurance isn’t mandatory in Spain. However, some mortgage companies may have it as a requirement. In such a case, you might be required to take some form of insurance coverage before signing the mortgage contract.

As much as insurance may not be a legal requirement, we highly recommend taking insurance for both building and contents as a reasonable consideration to protect your investment from various risks.

Capital gains tax

Capital gains realized on Spanish real estate are subject to a capital gains tax, and the tax rate varies per property and is typically progressive based on the income itself. After selling your property in Spain, you must pay applicable capital gains tax after considering all deductions and allowances.

When purchasing property in Spain, we highly recommend keeping digital and hard copies of all invoices concerning legal fees, notary fees, property register fees, among other expenses. Also, you should keep copies of all licenses and invoices in case of property renovations and other building work on an existing property. Consequently, you can offset such expenses against capital gains when you sell your property, thus reducing Spanish capital gains tax.

Our tax advisors can help you make more informed decisions concerning applicable deductions and allowances depending on specific autonomous regions in Spain. We advise on the best strategies to reduce your capital gains tax liability.

Other costs involved

Additionally, you have to pay notary costs, title deed tax, and land registration fees, usually set at 1–2.5%. There are no fixed fees for lawyers or real estate agents in Spain, but you can expect them to range from 1-7%, depending on the level of service needed.

Is buying real estate in Spain worth it?

As always, location is vital when it comes to real estate. Depending on the specific location, buying property in Spain is an excellent long-term investment for both locals and foreigners. Also, it’s a viable option for investors looking to get residency quickly in the beautiful European Union country.

Some buyers apply for a mortgage, while others purchase without obtaining finance when it comes to property financing. Many Spanish and international banks provide mortgages services, with some of them giving tailored deals for foreigners from specific nations.

Buying vs renting a property in Spain?

Buying or renting in Spain primarily depends on your specific circumstances. For example, most people have limited access to finance, thus opting to rent, which involves a far less financial outlay compared to buying.

If you’re moving to Spain long-term, buying may be more cost-effective. However, renting may be a more prudent choice for a short-term stay or those unsure how long they will stay in Spain.

As with many other nations, both have pros and cons to consider. Thus it would help if you tried to make informed decisions.

We recommend checking the Spanish property market forecasts for speculative buyers before investing or, even better, seeking advice from a professional.

Legal, business, and accounting solutions in Spain

As much as it’s not a legal requirement to purchase property in Spain assisted by a qualified expert, it’s highly recommended that you do. Buying a property is one of the biggest investments people make. So, why take the risk by not obtaining professional advice?

Spain has it all and with the proper due diligence and professional assistance, properties in Spain can provide to be beautiful homes and viable investments for years to come. We offer property buying guidance in Spain which is full-service and will make your purchase safe, secure and easier. We can take care of many processes for you utilizing the power of attorney. Contact us for more information and a quote.

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 the help of a Property Lawyer in Spain

Learn more

Rental Income Tax in Spain: Types, Deductibles, and Rates

/in ,

In this article, we will discuss the rental income tax in Spain. Among the taxes in Spain, rental income tax is a widespread Spanish income tax. Read this post for an overview about the types of rental income tax and the different rates.

What is the Rental Income Tax

You will have to deal with this tax when renting out your property. The tax can be divided into VAT tax and income tax. Depending on the situation, you will have to pay VAT tax or not. The income you create will be taxed similarly to other income taxes (such as personal income tax and corporate income tax).

Do I need to pay VAT on rental income?

Whether you need to pay VAT tax or not depends on what type of property you are renting out, and to whom you are renting the property.

When don’t you need to pay VAT tax on your rental income?

When a renter will use your property exclusively for living, you don’t add VAT tax to your invoicing. For example, if you are renting out an apparent or house to be used as a residence for a family, the rental income is not VAT taxed. This applies to lettings with living spaces only, which include apartments, houses, rooms in shared flats or houses, and any separate living quarter.

When do you need to pay VAT tax on rental income?

When you are renting out to a business or self-employed person to execute their economic activity, you need to pay VAT tax and add VAT tax on your invoicing. For example, when you are letting to a bakery, a pub, a hair salon or a restaurant. The same applies to lettings with non-living spaces, such as retail space, business areas and any other premise accessible only from the street.

Next to this, when you are renting out a storage place, you will also have to pay VAT tax on the rental. For example, when you are renting out a parking space or stockroom.

Rental income taxes in Spain

Rental income tax for individuals

Rental income tax for tax residents and non-residents in Spain are different. The difference is in the tax rates, rental property tax deductions, and the frequency of declaring your rental. However, both residents and non-residents must make the tax declaration in Spain over all the income from rent.

Rental income tax in Spain for Non-Residents

Non-residents are subject to the flat non-resident Income Tax (IRNR, Impuesto Sobre la Renta de personas No Residentes), a flat tax rate of 19% if you reside in the EU or EAA countries. If you are not from the EU or EAA countries, the flat tax rate is 24%.

Rental income tax in Spain for Tax Residents

The tax for tax residents on rental income is called IRPF (Impuesto sobre la Renta de Personas Físicas). It is a tax levied on the income obtained during a year from natural persons residing in Spain, no matter if they are Spanish. It is also a progressive and direct tax.

The rental income tax for tax residents is on a progressive rate of 19% to 47%. When you generate more income, you will pay more tax. The property owner pays the rental income tax, not the renter. The rental income tax for tax residents is different than for non-residents.

Tax for landlords Spain

Rental income tax for self-employed and companies

When you rent out business premises to a company or self-employed to carry out economic activities. You are obligated to pay VAT tax, and must register at the government as an Autonomo or company.

Rental income tax in Spain for self-employed

When you want to use a property management service, agent, lawyer or accountant for your property, it is wise to register as a self-employed (Autónomo) in Spain. Because when you are an Autónomo, your venture will pay the Autónomo tax, and being taxed as an Autónomo means you can deduct the VAT tax from renting your property.

Rental income tax in Spain for limited liability companies

When you plan a riskier venture or make more than 65.000 euro’s revenue from your Spanish properties, the Spanish limited company becomes attractive for its protective and cost benefits. For example, when people plan to build or make significant investments in Spain, they often form an SL company in Spain. Of course, with a Spanish limited liability company, you will be able to deduct the same property rental costs as an Autónomo.

Property rental income tax Spain

Personal income tax tranches for tax residents in Spain

Below you can find the personal income rates for tax residents. You will be considered a tax resident when you reside longer than 185 days in Spain.

Income Taxes Trenches 2021 Total
Up to 12.450 euros 19,0 %
From 12.450 euros to 20.200 euros 24,0 %
From 20.200 euros to 35.200 euros 30,0 %
From 35.200 euros to 60.000 euros 37,0 %
From 60.000 euros to 300.000 euros 45,0 %
From 300.000 euros and on 47,0 %

Applying the marginal rate directly, a person who earned 65,000 euros would pay 45% of that income in taxes: 29,250 euros. Fortunately, the 2021 income tax table is progressive, and this is what you would pay:

  • First IRPF tranche: A person pays 19% of 12,450 euros – 2,365.5 euros
  • Second IRPF tranche: The person pays 24% of 7,750 euros (the difference between the first and second bracket) – 1,860 euros.
  • Third IRPF tranche: The person pays 30% of 15,000 euros (the difference between the second and third tranche) – 4,500 euros.
  • Fourth IRPF tranche: The person pays 37% of 24,800 euros (the difference between the third and fourth tranche) – 9,176 euros.
  • Fifth IRPF tranche: The person pays 45% of 5,000 euros (the difference between the fourth and fifth tranche) – 2,250 euros.
  • Sixth IRPF tranche: The person pays 47% of the difference between the fifth and sixth tranche, that is, the amount that exceeds those 300,000 euros (in this case, it would not apply).

Interestingly, the final percentage paid by personal income taxpayers is a division of two tax tranches. The first one is the state tax, which goes to the Government, and the second one is the autonomous tax, which the independent communities receive.

In addition, you must take other aspects such as the family situation into account, which includes: being married or single, having children under 25 years old, children under three years old, living with people over 65 years old, etc.

Situations to consider Number of descendants
0 1 2 or more
Single, widowed, divorced or legally separated taxpayer. – 15.947 € 17.100 €
A taxpayer whose spouse does not obtain income exceeding 1,500 euros per year, excluding exemptions. 15.456 € 16.481 € 17.634 €
Other situations 14.000 € 14.516 € 15.093 €

Getting Rental income tax as a property owner

Deductibles from rental income tax

According to the Spanish tax authorities, EU members and EEA citizens can deduct the following expenses from their rental income tax. You can deduct costs from the rent because they are used for the rental property to create income.

  • Administration and accounting costs: costs enquired to pay Spanish tax and properly follow Spanish tax laws.
  • Notary and Lawyer costs: e.g. for formalizing rental contracts drafting contracts, or tenant eviction.
  • Real estate agent fees or key holder fees
  • Water, electricity, laundry, cleaning, and utility costs
  • Security services: e.g. gated communities
  • Mortgage interests and unpaid rents: Note that rental income is the amount of rent receivable (not received). You can deduct due rents until six months have passed from the first debt collection action or if the tenant is legally insolvent.
  • Depreciation of the property at 3%: You can deduct the depreciation of 3% of buildings or the cadastral value. The cost of buildings is frequently unknown as the purchase deed does not usually separate the two. In this case, the building’s proportion is taken from the cadastral value. Failing this (e.g. non-Spanish property), the tax office will accept that buildings represent a reasonable proportion, perhaps 2/3rds of the total cost.
  • Interest on loans taken out to finance acquisition, improvements, and property maintenance.
  • Maintenance, repairs, and renewals: The property’s expansion or improvements are not deductible.
  • Non-state taxes and surcharges related to the property: This category covers costs like IBI and charges for the trash, and it includes any fines.
  • Insurance policies (e.g. for fire, civil liability, fire etc.)
  • Primary maintenance and reparation costs

Like other Spanish tax deductions, you must justify all deductible costs with relevant documentary evidence. They are valid only if you have the invoice, and quotations are not valid documents. If you have an accountant in Spain, you can send them your invoices, and they will take care of the rest.

Spanish property rental income tax

Double taxation agreements and rental income tax

The Double Taxation Agreement is an agreement that might have been signed by Spain and your country of residence (or state where you need to pay tax). The Spanish tax authorities make these double taxation agreements to check and regulate where residents and non-residents will have to pay tax.

According to what is established in the OECD Convention model, the gross income generated through Spanish property must be taxed in Spain, regardless of the taxpayer’s tax residence.

Personal Income Tax Categories

The income tax consists of different income taxes, and you will need to consider all incomes when making your personal tax declaration.

  • Rental income tax: As the name already says, they are income obtained from tangible elements, such as leases of premises or subleases.
  • Payroll taxes: The most important one for the majority of the inhabitants is the income from salaries. Despite its name, this part does not include all income from work but only those earned as an employee of a company, and it excludes self-earned income.
  • Capital gains taxes: Income generated from selling a property is capital gains income. e.g. the income can be from selling a house, a plot of land, or commercial space.
  • Dividend taxes: Dividends or profits from participating in a business.
  • Business income tax. This last one comes from doing business on your account. Business activity, in turn, is defined as an activity that includes work and capital together and is aimed at making money.

For each part of the tax base, costs related to this activity can be deducted.

Tax specialist for real estate taxes

Examples of personal rental income tax calculations

Below you can find a few examples of rental income tax calculations.

Example 1: rental income tax rate in Spain for residents

In the following example, we consider the case of a resident in Spain with a taxable base net of 30,000 euros and no reductions that the regulations take into consideration as personal and family circumstances (a single). As we see in the table, the following types and sections would be applied:

  • 19% to the first 12,450 euros
  • For the next 7,750 euros (from 12,450 euros to 20,200 euros) we would apply a 24%
  • And to the next 9,800 euros, until reaching 30,000 euros of the salary in the example, we would apply a 30%

In this case, the landlord with a gross of 30,000 euros per year would end up with a net of 24,393 euros per year, which divided by 12 payments gives an effective payroll, of 2,032 euros per month.

Example 2: rental income tax rate in Spain for non-EU/EEA residents

Using the same example as above, a person who has an annual rental income of 15,000 €, and expenses of 3,600 €, will pay the following tax on their rental income in Spain:

  • Total rental income: 15,000 €
  • Deductible expenses: 3,600 €
  • Tax base: 11,400 €
  • Tax rate: 24%
  • Total due: 2,736 € (11,400 € * 0.24)

Example 3: rental income deductions

Assuming you have a rental property that generates an annual rental income of €15,000. If the community expenses are €2,000 per annum and repair and improvement costs amount to €1,600 per annum, the tax on your rental income in Spain will be calculated as:

  • Total rental income: 15,000 €
  • Deductible expenses: 3,600 €
  • Tax base: 11,400 € (15,000 – 3,600)
  • Tax rate: 19%
  • Total due: 2,166 € (11,400 * 0.19)

Get help from an accountant to do your taxes in Spain.

income tax return for rental income

Frequently asked questions on Rental income tax in Spain

Below you can find the answers to some frequently asked questions about rental income tax in Spain.

Is the Personal Income Tax the same throughout the Spanish territory?

Partially, while the national Spanish tax office has put forward national income tax rates, there are still differences between the regions because they can set their tax rates. Next to the rental income tax rates, there are specific differences in terms of tax deductions. It is best to contact an accountant in Spain who knows the tax implications of the local property tax.

How to declare rental income?

The frequency of declaring your rental depends on your status as a Resident or Non-resident. For residents as we know, the Spanish tax on rental income declaration takes place on annual basis, nevertheless, for non-residents, the declaration has to be submitted every three months based on a set calendar, as follows:

  • April 20th: Declaration for incomes obtained in January, February, and March.
  • July 20th: Declaration for incomes obtained in April, May, and June.
  • October 20th: Declaration for incomes obtained in July, August, and September.
  • January 20th: Declaration for incomes obtained in October, November, and December.

What happens if I pay late?

The deadlines are very clear in the previous question. If you pay just one day late, the Tax Office will send you a penalty for:

  • 5%: payment made within three months of the deadline
  • 10%: if more than three months pass, but less than 6
  • 15%: between 6 and 12 months
  • 20%: plus interest if you pay more than one year late

So why does Spain have a rental tax?

The main purpose is to respond to the principle established by the Spanish Constitution that all Spanish Citizens must contribute to the support of public expenditures. On the other hand, it tries to favour those people who are in a more precarious situation. Thus, it aims to contribute to a more efficient economy by promoting or taxing certain activities.

How many income taxes are there?

In this article, we will focus on the rental income for individuals. However, there are two income taxes: the Personal Income Tax is levied on the income of individuals, while the Corporation Tax is levied on that of limited entities. In some exceptional cases, there are legal persons and other entities that do not pay Personal Income Tax or Corporation Tax, but it is the natural or legal persons involved in that entity who declare the income obtained based on their participation in that legal entity. There is also a tax on Tax on Economic Activities (IAE) in Spain, which is paid under certain circumstances.

Next to rental income tax, individuals that own property in Spain might have a tax liability in the form of wealth tax. Individuals that own more than 700.000 euros worth of assets in Spain, will have to pay this wealth tax.

tax for non residents

A word from SublimeSpain

In conclusion, Spanish rental income tax is one of the most common of Spanish property taxes. The Tax Office charges everyone who gets income in the Spanish territory regardless of whether they are a Spanish resident or not. Depending on how you are registered and the money you make you will either pay income tax, vat tax, tax on economic activities, wealth tax or taxes on your property. We strongly recommend hiring a tax advisor or accountant if you are planning to rent out your property. For a fixed fee, you can take care of all the government forms that are required in Spain. Contact us for a quote today.

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.