Spain Tax Guide
Everything you need to know about taxes as an expat in Spain.
Disclaimer
This guide is for informational purposes only and does not constitute tax advice. Always consult with a qualified tax professional for your specific situation.
Overview
Spain taxes residents on worldwide income at progressive rates from 19% to 47%+. Non-residents pay flat 24% on Spanish-source income only. The Beckham Law offers significant tax benefits for qualifying expats—24% flat tax on Spanish income for 6 years.
Tax Residency Rules
Spain uses three tests—meeting ANY ONE makes you tax resident: 1. **183-Day Rule:** Spend more than 183 days in Spain during calendar year. Sporadic absences count as days in Spain unless you prove tax residency elsewhere. 2. **Center of Economic Interests:** Primary professional, business, or investment activities based in Spain. 3. **Family Ties Presumption:** If non-separated spouse and dependent minor children habitually reside in Spain. **Residents:** Taxed on worldwide income at progressive rates (19%-47%+) **Non-residents:** Taxed only on Spanish-source income at flat 24%
Income Tax Rates
| Income Range | Tax Rate |
|---|---|
| 0 - 12,450 | 19% |
| 12,450 - 20,200 | 24% |
| 20,200 - 35,200 | 30% |
| 35,200 - 60,000 | 37% |
| 60,000 - 300,000 | 45% |
| 300,000+ | 47% |
Regional variations significant: Madrid tends lower; Valencia/Catalonia higher
Capital Gains Tax
Capital gains and savings income taxed at separate rates: - €0-6,000: 19% - €6,001-50,000: 21% - €50,001-200,000: 23% - €200,001-300,000: 27% - €300,000+: 30% No distinction between short-term and long-term capital gains in Spain.
Property Tax
Property Tax (IBI): Municipal tax on ownership, 0.4%-1.3% of cadastral value annually. Wealth Tax: Net assets above €700,000 (€300,000 primary residence exemption for residents). Rates 0.2%-3.5%. **Madrid and AndalucÃa offer 100% exemption.**
VAT / Sales Tax
VAT (IVA): - Standard rate: 21% - Reduced rate: 10% (food, hospitality, transport) - Super-reduced rate: 4% (basic necessities, medicines, books)
Special Tax Regimes
Beckham Law (Régimen Especial para Trabajadores Desplazados)
Major tax benefit for qualifying expats
Eligibility:
No prior Spanish residency in 10 years before arrivalWork-related relocation (employment, Digital Nomad Visa, company transfer, ENISA-approved entrepreneurs)Perform at least 85% of work in Spain
Benefits:
- Flat 24% tax on Spanish-source employment income up to €600,000
- 47% on income above €600,000
- Foreign income EXEMPT from Spanish taxation
- Duration: 6 tax years (year of arrival + 5 following)
- No Modelo 720 foreign asset declaration required
- Wealth tax only on Spanish assets
For US Expats
US citizens and green card holders must file US taxes annually regardless of residence. **Foreign Earned Income Exclusion (FEIE):** 2025 limit $130,000. Can be used but most experts recommend Foreign Tax Credit for Spain instead. **Foreign Tax Credit (Form 1116):** Dollar-for-dollar credit for Spanish taxes paid. Spanish rates often exceed US rates, resulting in zero US tax liability with credit carryforward. **US-Spain Totalization Agreement:** Prevents dual Social Security taxation. Employees assigned abroad pay only home country's Social Security for up to 5-7 years. **FBAR (FinCEN Form 114):** Required if $10,000+ aggregate in foreign accounts at ANY time. Due April 15 (automatic extension to October 15). Penalties: up to $10,000 non-willful; up to 50% of balance for willful violations. **Form 8938 (FATCA):** For expats abroad, thresholds are $200,000 year-end or $300,000 anytime (single). Filed with tax return. **Modelo 720:** Spanish foreign asset declaration for residents. Required if €50,000+ in foreign accounts, securities, or real estate per category. Due March 31. Beckham Law holders exempt. **CRITICAL for Americans:** Spain does NOT allow dual citizenship with USA. Americans must renounce US citizenship to become Spanish citizens.
Foreign Earned Income Exclusion (FEIE)
FEIE ($130,000 limit in 2025) can be used but Foreign Tax Credit is typically more beneficial for Spain due to higher Spanish tax rates. Most tax advisors recommend using Foreign Tax Credit (Form 1116) instead.
Tax Treaty Benefits
US-Spain Tax Treaty provisions: - Dividends: 15% maximum withholding - Interest: Generally 0% - **Savings Clause:** US can still tax its citizens as if treaty doesn't exist The treaty helps prevent double taxation but the Savings Clause means US citizens don't get full treaty benefits.
Filing Deadlines
Spain: Annual tax return due June 30 (with payment). Quarterly estimated payments may be required for self-employed. US: April 15 (automatic 2-month extension to June 15 for expats abroad, can extend to October 15). FBAR: April 15 (automatic extension to October 15). Modelo 720: March 31.
Recommended Approach
**Recommended approach for US expats:** 1. File US taxes annually (Form 1040) 2. Claim Foreign Tax Credit (Form 1116) for Spanish taxes paid 3. File FBAR if Spanish accounts exceed $10,000 4. File Form 8938 if foreign assets exceed thresholds 5. Consider Beckham Law if employed (not self-employed) 6. Work with dual-qualified advisor familiar with both systems **Typical advisor costs:** - Basic Spanish return: €150-400 - Complex with foreign income: €400-800 - Dual US-Spain compliance: $2,000-5,000+ annually
Need Help with Your Taxes?
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