Get to know the author
Taxes in Spain are often a top concern among US expats considering a move to the country. Besides a lack of familiarity with Spain’s tax laws and confusion about how to file, many also worry about double taxation.
As a tax firm specifically geared toward Americans abroad, we understand the complexities of Spanish tax laws. And fortunately, we’re here to break it all down for you in a thorough, but digestible, way.
Below, we’ll go over how to determine Spanish tax residency, how Spanish taxes work for US expats living in Spain, how to avoid double taxation, and more.
Snapshot of taxes in Spain
- Primary tax forms: Modelo 100
- Tax deadline: June 30th
- Reporting website: Agencia Tributaria
- Administrative language(s): Spanish
- US Tax treaty? Yes
- Totalization agreement? Yes
Determining Spanish tax residency & liability
If you meet at least one of the following criteria, you’re considered a resident for Spanish tax purposes:
- Spend over 183 days per calendar year in Spain, OR
- Have financial interests located within the country, OR
- Have a Spanish spouse or dependent children (as Spain is considered the taxpayer’s habitual place of residence in this case)
Tax residents in Spain are subject to Spanish personal income taxes on their worldwide income, while non-tax residents are only subject to taxation on their Spanish-sourced income.
Understanding the Spanish tax system and deadlines
Taxation in Spain is handled by the Agencia Tributaria, or Spanish tax agency. They are responsible for providing information to and assisting taxpayers, applying tax laws and collecting tax revenue, enforcing compliance and prosecuting certain financial crimes, managing customs, and more.
Generally, Spanish tax residents must file a tax return (Modelo 100) if:
- Their employment income exceeds €22,000, OR
- Their employment income exceeds €15,000, AND:
- They receive employment income from more than one payer
- The amount of income they receive from the second payer and beyond exceeds €1,500
Taxes for a given calendar year must generally be filed and paid by June 30th of the following year. You can pay in two installments: one by June 30th, and the second by November 5th.
Note:
If you have certain types of income, such as self-employment and rental income, you declare and pay taxes quarterly.
Non-tax residents, on the other hand, must file a non-resident tax return (Modelo 210) if they have any Spanish-sourced income by December 31st.
You can do this online through the Agencia Tributaria portal or with the help of a Spanish tax professional. Before you can file and pay your taxes, you’ll need to get a Spanish tax number.
Other common Spanish tax forms you may encounter include:
- Modelo 030: Elect tax resident vs. non-tax resident status
- Modelo 720: Declare foreign assets exceeding €50,000 (~$54,258)
- Modelo 151: If you’re a Beckham Law tax regime user
Taxation of income in Spain
Spain taxes income depending on whether you’re a tax resident and what kind of income you bring in.
Spanish tax residents
Income for Spanish tax residents is taxed differently based on whether it falls under the general taxable income or savings income category. In general, Spanish income tax rates are marginal and levied on a progressive basis.
General taxable income tax rates for 2024
General taxable income includes anything that doesn’t fall into the savings category, such as employment-related income, pensions, and rental income.
| Income (EUR) | Income (USD) | Tax Rate |
| Up to €12,450 | Up to ~$13,514 | 19% |
| Between €12,450 & €20,200 | Between ~$13,514 & ~$21,926 | 24% |
| Between €20,200 & €35,200 | Between ~$21,926 & ~$38,207 | 30% |
| Between €35,200 & €60,000 | Between ~$38,207 & ~$65,126 | 37% |
| Between €60,000 & €300,000 | Between ~$65,126 & ~$325,629 | 45% |
| Above €300,000 | Above ~$325,629 | 47% |
Savings income tax rates for 2024
Savings income includes capital gains from transfers of assets, dividends, interest, and life and disability insurance payouts.
| Income (EUR) | Income (USD) | Tax Rate |
| Up to €6,000 | Up to ~$6,512 | 19% |
| Between €6,000 & €50,000 | Between ~$6,512 & ~$54,264 | 21% |
| Between €50,000 & €200,000 | Between ~$54,264 & ~$217,055 | 23% |
| Between €200,000 & €300,000 | Between ~$217,055 & ~$325,562 | 27% |
| Above €300,000 | Above ~$325,562 | 28% |
The Beckham Law
The Beckham Law is a beneficial tax regime for foreigners originally named after David Beckham, who was the first beneficiary of the program.
Under the Beckham Law, qualifying new Spanish tax residents are subject to taxation only on their Spanish-sourced income. They also qualify for a special tax rate: 24% on income up to €600,000 (~$651,111). Anything above that €600,000 threshold is taxed at a flat 45%.
This program lasts for a new tax resident’s first six years in the country, after which point they will be taxed as a normal tax resident. While most foreigners who come to Spain for work qualify, self-employed individuals (aka autónomos) are notably excluded.
Non-tax residents
Anyone who isn’t a Spanish tax resident is taxed only on their Spanish-sourced income (income earned within Spanish territory or derived from Spanish sources) through the IRNR—Non-Resident Income Tax.
Non-residents’ income tax rates are generally lower:
- General: 24% (or 19% for nationals of EU member states)
- Capital gains, interest, & dividends: 19%
- Royalties: 24%
- Pension income: Between 8% and 40%
Reminder:
Exact tax rates may vary from one Spanish autonomous community to another.
Deductions & allowances
Some common tax allowances for US expats living in Spain include:
- A personal allowance of €5,550 (~$6,022), which increases to €6,700 (~$7,269) for those over 65 and €8,100 (~$8,788) for those over 75
- Those with disabilities may claim an additional allowance
- An allowance of €1,150 (~$1,248) for dependent parents/grandparents over 65 or €2,550 (~$2,767) if over 75*
- Allowances for dependent children*:
- First child: €2,400 (~$2,604)
- Second child: €2,700 (~$2,930)
- Third child: €4,000 (~$4,340)
- Fourth child or beyond: €4,500 (~$4,882)
- Note: Allowance increases by €2,800 (~$3,038) for children under three
* Annual income may not exceed €8,000 (~$8,681).
You can also deduct:
- Social security contributions
- Pension contributions
- Up to €1,500 (~$1,628) for individual plans or €8,500 (~$9,223) toward company plans
- The costs of buying and renovating your primary residence
- Charitable donations
Other taxes in Spain
Property taxes
There are several different types of property tax in Spain:
- Property purchases: Typically between 10% and 12% of the purchase price
- Property ownership: Typically between .4% to 1.1% of the property’s value
- Non-residents usually need to pay an additional 24% on 1.1% to 2.2% of the property’s value
- Property sales: Typically between 5% and 15% of the selling price
Social security taxes
Spanish employees typically have 6.45% of their paycheck automatically withheld for social security taxes, plus an additional charge for disability insurance (typically 1.5% for office workers).
Because autónomos have no employer to withhold taxes from their paychecks, they must pay this tax independently. In the first year of self-employment, they pay just €80 (~$87) per month. After that, they will pay from €230 (~$250) to €500 (~$543) per month, depending on overall income.
Pro tip:
The US has a totalization agreement with Spain, which helps US expats living there (and vice versa) avoid paying social security taxes to both countries.
VAT
The value-added tax (VAT) in Spain — the tax applied to most goods and services — is referred to as the Impuesto sobre el Valor Añadido/Agregado, or IVA.
The standard rate is 21%, although discounted rates apply to certain goods and services:
- 10% IVA: Certain foods, water bills, certain medical goods, domestic travel by road or rail, hotel accommodation, bars, etc.
- 4% IVA: Certain foods, certain medical goods, newspapers, social services, etc.
- 0% IVA: Gold, sea/air travel
The IVA is typically factored into the price of goods you see displayed in stores. Elsewhere, it usually shows up as a separate line item on the bill.
Note:
Autónomos must charge IVA to clients based inside the EU on each invoice and remit that income to the government on a quarterly basis.
Wealth tax
Spain has an annual wealth tax based on individuals’ net worth. Specific tax rates vary depending on the total value of an individual’s assets, ranging from .2% to 3.5% on estates worth over €2 million (~$2,169,868) after applying relevant deductions.
How to avoid double taxation as an expat in Spain
Due to the US’s citizenship-based taxation system, any American citizen or permanent resident who meets the minimum income reporting threshold must file a US tax return, regardless of where in the world they reside.
If you also owe taxes in Spain, that could open you up to double taxation.
Spain does have a tax treaty with the US that, in theory, prevents double taxation. However, the benefits are limited due to the Saving Clause, which allows the US government to act towards its citizens as if the treaty didn’t exist. Most Americans in Spain are better off claiming one or more of the following tax breaks:
The Foreign Tax Credit (FTC)
The FTC provides Americans abroad with dollar-for-dollar credits on any taxes paid to a foreign government (provided that the taxes are legal, paid, made in your name, and based on income), which can then be used to offset US tax related to foreign income.
The Foreign Earned Income Exclusion (FEIE)
The FEIE allows Americans abroad to exclude a certain amount of their foreign-earned income from taxation ($120,000 for tax year 2023). To qualify for the FEIE, expats must meet either the Physical Presence Test or Bona Fide Residence Test.
Doing so also makes expats eligible for the Foreign Housing Exclusion or Deduction, which allows them to further exclude income up to the value of qualifying housing expenses like rent, utilities, necessary repairs, and more.
Navigate taxes in Spain with confidence
US expats who are tax residents in Spain or earn Spanish-sourced income very likely have to file a Spanish tax return. Add that to their existing US tax and reporting obligations, and things can get confusing (to say the least). To stay fully compliant and minimize your tax liability, it’s best to consult a tax professional.
Resources:
- Spain – Individual – Taxes on personal income
- Tax Agency: Structure and Functions
- Spain – Individual – Tax administration
- Tax Agency: Annual calendar
- Beckham Law in Spain: How to Save Taxes as a Foreigner
- Spain – Individual – Deductions
- The Spanish tax system
- Property buying costs in Spain: taxes and fees in 2024
- Property Tax In Spain
- What are the taxes and costs of selling a house in Spain in 2023?
- Spain – Individual – Other taxes
- The Spanish flat-rate for freelancers in 2023: What, how much, and the finer details
- VAT for Freelancers in Spain: A Step-by-Step Guide
- Wealth Tax in Spain
- Late Tax Filing in Spain: What Could Happen?
