10 tips about Spanish taxes if you are foreigner
The fiscal systems are different in each country. Although Spanish taxes are similar in other countries, there are some points that you should know in order to avoid problems with the Spanish tax office. From AGL we have prepared a list of ten tips that you should keep in mind if you have to pay taxes in Spain and you are foreigner:
- Wordwide income: in case you are tax resident in Spain you´ll have to prepare your Income tax declaration, including not only the incomes in Spain but all the incomes all over the world (rentals, dividends, etc.)
- Deduction to avoid double taxation: in case you have paid taxes in your country for rentals, payrolls, dividends, etc. you can deduct totally o partially them, according to the Agreement to avoid double taxation between Spain and your country, if it exists.
- Impuesto sobre el Patrimonio: in some cases and in some Comunidades Autónomas of Spain you have to submit the Wealth Tax declaration in case you have assets over a certain amount, around 500.000-700.000 euros, including assets abroads. This can happen both if you are tax residents in Spain or not.
- Form 720: if you are tax resident in Spain, you have to submit the yearly declarations of assets abroad in case you have more than 50.000 euros abroad in any of these three main blocks: bank accounts / shares, investment funds and other financial products / real estate properties.
- Reduction for autónomos: in case you are in your two first years as autónomo, you can have a reduction of 20% of your taxes for this activity.
- Tax refunds: one of the main causes to have a tax audit is to claim a refund of VAT or Income tax, so you should be sure that you have all the documents to deduct in case the tax office request them.
- Change of address: remember to inform to the tax office about your change of address in Spain or to another country and also if you are leaving Spain and you´ll be no more Spanish tax resident.
- Digital certificate: in some cases eg autónomos it is compulsory to have a digital signature for some procedures to receive documents from the Spanish authorities. Even if it is not compulsory in your case, we recommend to have a digital signature, that can help to you with other procedures in Spain.
- Tax exemptions if you are working abroad: if you are an employee and you work abroad some periods, you should check if you can consider tax exempt a proportional part of your payrolls.
- Finally, find a Spanish tax advisor with experience advising foreigners. Not all the tax Spanish have a good knowledge of taxes for foreigners and even better if they can speak your language (if can be AGL, better ; – )
In case you are foreigner in Spain and you want to ask any question about these points, do not hesitate to contact us at AGL.
Taxes in Spain – Form 720