Taxes in Spain for Expats – Question #1: Resident or Non Resident ?
Resident or non-resident ? That is the first question you should answer.
Taxes is an important matter for an expat. Do it right from the start and enjoy the feeling of being sure of optimizing your taxes or do it late and always think about the taxman creeping behind your back years afterward.
I will try here to sum up a few key ideas that will enable you to navigate your way yourself through the key questions you must ask yourself.
Are you a resident or a non-resident ?
You are Resident in Spain if you comply with one of these conditions:
- You spent more than 183 days on the Spanish territory this fiscal year, including short travels you may have down out of Spain during these 183 days.
- Spain is the territory where are the majority of your direct or indirect economic interests.
This status of resident or non-resident is for the entire fiscal year (from January 1st to December 31st).
What does this mean to you ?
- If you are a resident, you pay your taxes,
- If not, you pay most of your taxes in your country of residency, not Spain then, apart from specific taxes on assets.
Simple. Straightforward. Sweet.
OK. Let’s take one typical case which apply to a majority of our clients:
- Question: “I just moved to Spain during this fiscal year for a new job in Madrid. Where should I pay my revenue taxes?”
- Answer: Well, if you moved before July 1st, all your revenues should be declared in Spain. If you moved after, all your revenues should be declared in your previous country”
This means you should declare everything your earned this year to one country.
If you need help to move to Madrid zen, do not hesitate to send us an email !
Photo credit: DAVID SOUZA (401kcalculator.org)