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MONEY
Taxation
Taxes are inevitable and inevitably confusing, especially in a foreign country.
Here is a potted guide to how to cope with Spain's fiscal system.
The tax regime has changed dramatically
in Spain in the past decade. It is far harder
now to avoid paying tax and the
penalties are high. Income tax in particular
has risen considerably, although it
remains lower than the EU average.
But it is still very difficult to get consistent
advice on what you should and
shouldn't be paying. The rules keep
changing, the system is complicated and
you are likely to receive different advice
from every tax adviser you consult.
Foreign residents would be wise to find
yourself an English-speaking adviser to
explain the intricacies of your tax situation
as it will depend upon numerous
complicating factors such as where you
live in Spain, whether you are resident or
non-resident, the source of your income
and your assets.
The Spanish tax year runs from 1
January to 31 December and taxes are
levied by governments at three levels:
centrally, regional and locally. There are
assessment and tax collection centres in
all provincial capital towns whose information
section (oficina de informacion al
contribuyente) will offer free advice and
help you fill in your tax declaration,
though they won't do it for you.
WHO PAYS
There is a difference between being a
Spanish resident for civil purposes (ie. by
having a residence card) and being a resident
for tax purposes. If you live in
Spain for more than 182 days per year,
you are automatically considered a
Spanish resident for tax purposes.
This means you will be liable to pay
income tax (Impuestos sobre la renta de las
personal físicas, IRPF) on your worldwide
income when you complete a declaration
(Declaración de la Renta) during May or
June the following year.
Personal Income Tax starts at 17 percent
and rises to 48 percent. It is a direct tax
levied on the income of individuals,
minus the expenses deductible according
to Spanish law. At present if you earn
less than €21,035 you do not have to fill
in an income tax return.
Non-residents Income Tax (IRNR) is calculated
according to any income derived
in Spain, including a money deposit with
a Spanish bank, a property in Spain or
income made from any business in
Spain. The United States, however, is the
only country that taxes its non-resident
citizens on income earned abroad.
Residents are taxed on their worldwide
income. But you may deduct income tax
paid in your home country to avoid double
taxation.
MAIN TAX OFFICES
•C/ Guzmán el Bueno, 139, 28003 Madrid,
tel. 91 582 67 67
•Pza. Doctor Letamendi, 13-.23, 08007
Barcelona, tel. 93 291 11 00
•Ctra Malaga 174, 04700 El Ejido, Malaga,
tel. 95 048 3311
•Pz. de la Montañeta, 8, 03001 Alicante,
tel. 96 514 97 00
•C/ Cecilio Metelo, 9, 07003 Palma de
Mallorca, tel. 971 44 88 00
•Moll de Ponent, 1, 07701 Mahón,
tel. 971 35 23 87
Contact the Agencia Tributaria (tel. 901
335 533, www.aeat.es) for details of all
local tax offices in each region.
For information about income tax and
VAT refunds, tel. 901 121 224.
22 SPAIN EXPAT SURVIVAL GUIDE
WWW.EXPATICA.COM