A very common question from Expats that have chosen to live in Spain or spend most of their time here is, ‘at what point do you become a tax resident of Spain?’
- If you spend more than 183 days in a calendar year in Spain or:
- your wife/husband lives in Spain
- your children are going to school here
- the majority of your economic interests are located in this country
then you will be considered a tax resident and therefore usually obliged to make a tax declaration to the Spanish authorities.
People that have lived in the UK or other European countries will be familiar with the term ‘taxed at source’. If you are working for a company, they will deduct tax on behalf of the tax office here in Spain in the same way as in other EU countries. The same applies to interest on savings, which again is usually taxed at source.
You may not need to file a declaration if all your taxable income from employment (provided that you only have one employer) and savings is below €22,000 in the tax year
if the above mentioned income comes from more than one source, providing the sum of the amounts received from the second and remaining sources do not exceed 1,500 euros in total per year.
The Tax Office also establishes a limit of 12,000 Euros before which the personal tax return must be submitted
When the income is from more than one source (see previous point).When alimony is received from the spouse.When alimony is received for food that is not exempt When the income provider is not obliged to retain tax.When the income provider retains a fixed amount in line with tax regulation article 80.1. 3rd and 4th It is worth noting that if you fall into the following categories, you must file a return in Spain regardless of income.
- if you are due a refund from the tax office and want to claim it back
- if you have a capital gains (dividends, interest etc) above 1.600 €/year
- However we should point out that if you fall into one of the following categories you do not need to file a personal tax return.
- if you are a taxpayer with a combined income (work, trading activities, capital gains etc) of 1000 Euros per annum or less
- if you made patrimonial losses of less than 500 Euros per year.
There are many different scenarios that mean you may need to declare income or tax in Spain and some of these may be more complex than you first thought.
The best way to work out if you need to declare, and if so how much, is to use the services of professionals such as ourselves that know that Spanish taxation system and can guide you in the right direction.
The authorities are much hotter than they used to be, and fines will be issued for non-compliance of the taxation rules and regulations.
The personal tax return is due between April 2018 and June 2018 so now is the time to get your tax affairs in order and get ready to submit the relevant forms. Why not come in for a free consultation and we can tell you how we will be able to help you? Our door is open!