A foreigner who resides or has income in Spain may be subject to various taxes. Taxation will depend on whether the person is a tax resident in Spain or not. Here I explain the main tax obligations that may apply:
1. Tax residents in Spain
A person is considered a tax resident in Spain if they spend more than 183 days a year in the country or if their center of economic interests is in Spain.
- Personal Income Tax (IRPF): Tax residents must declare and pay taxes on their global income, that is, on income generated both in Spain and abroad.
2. Non-tax residents
Non-tax residents are those who do not meet the above criteria. They only pay taxes on income generated in Spain.
- Non-Resident Income Tax (IRNR): Non-residents pay this tax on income obtained in Spain. The rate varies depending on the type of income:
- Employment income: Generally 24% (25% for residents of non-EU countries).
- Capital income: Also 19% (24% for non-EU residents).
- Capital gains: A progressive scale applies, ranging from 19% to 26%, depending on the amount.
3. Wealth taxes
If the foreigner owns property in Spain, he or she may be subject to Wealth tax, although this tax is mainly applied to tax residents.
4. Value Added Tax (VAT)
Foreigners who buy goods or services in Spain must also pay VAT, which is generally 21%, although there are reduced rates for certain products and services.
5. Local taxes
Depending on the locality, there may be local taxes, such as the Real Estate Tax (IBI) if you own a property in Spain.
6. Inheritance and Gift Tax
If a foreigner receives an inheritance or gift in Spain, they may be subject to this tax, which varies depending on the autonomous community.
It is important that any foreigner considering residing or working in Spain is well informed about their tax obligations and, if necessary, consult with a tax advisor to properly comply with current regulations.