What taxes are paid in Spain as a foreigner?

The taxes that are paid in Spain as a foreigner are many and varied and it is important to know them and know when and how they are applied.

Is it mandatory to pay taxes in Spain as a foreigner?

Yes. Both tax residents and non-residents must pay taxes in Spanish territory.

If you are a foreigner but you live or have any type of economic activity or asset in Spain, you will be obliged to pay taxes. To find out what taxes you will have to pay and in what amount, you must know if you are considered a resident or not in tax terms.

You will be considered a tax resident if you meet one of the following three requirements:

You live in Spain more than 183 days per year.
You have economic interests in the country.
Your spouse and/or children live in Spain.

Taxes in Spain for foreigners

As we have seen, even if you are a foreigner, you have the obligation to pay certain taxes depending on whether or not you are considered a resident and the activities you carry out in the country. Taxes for non-residents are the same or even higher than those for residents.

Personal Income Tax (IRPF)

The IRPF taxes the income generated in a financial year, both from work income and from capital income.

Non-residents must declare the taxes that have been generated in Spain and residents all income and profits generated anywhere in the world.

The amount to be paid will depend on the income that has been generated since this tax is progressive. In addition, the personal and family situation will also influence the final amount to be paid.

Income Tax for Non-Residents (IRNR)

If you are not a tax resident in Spain but have an asset that generates income, you will have to pay Non-Resident Income Tax.

There are agreements to avoid double taxation, so this tax will only apply to the properties and shares of companies that you own.

This tax rate will be 24% on income if you are a citizen from outside the European Union and 19% if you are from the European Union.

Wealth Tax

If you are the owner of a property in Spain, you must pay Wealth Tax, whether or not you are considered a tax resident. If so, this tax applies to assets from all over the world, not only those located in Spanish territory.

This tax is applied to assets with a high value and will be higher or lower depending on the Autonomous Community in which you reside. In addition, in each of them there are different bonuses.

Inheritance and Gift Tax

The Inheritance and Donations Tax is a state tax levied on inheritances and donations received.

The amount to be paid will depend on the Autonomous Community of residence as there are its own regulations and discounts applicable in each of them.

Capital Gains Tax

If you are a tax resident in Spanish territory, you must pay between 19 and 23% taxes on the profit obtained from the sale of the property or shares. In addition, you can benefit from bonuses and exemptions.

If you are not a resident, you can only deduct the expenses of the lawyer, the notary and the agency.

On the other hand, if you are not a resident and live outside of Europe, the tax rate will be 24%. However, if you live in another country of the European Union, you will pay only 19% for this tax.

Taxes when buying a home

If you are a foreigner and you buy a property in Spain you must pay the following taxes:

Property Transfer Tax (ITP). It is a tax that applies only to second-hand properties and varies between 8% and 10%.
Value Added Tax (VAT). This tax will be paid by those who buy a new home and will be 10%.
Documented Legal Acts Tax (IAJD). Taxes the acts formalized in public deeds and the amount is set by each Autonomous Community.

Value Added Tax (VAT)

This tax is levied on consumption and is applied to any product you buy or service you hire from a self-employed person or company.

The normal rate of VAT is 21%, although there is also a reduced rate of 10%, a super-reduced rate of 4%, and there are some products that do not apply VAT because they are exempt, such as courses and educational training.

Taxes in Spain as a foreigner are mandatory if you reside or carry out any economic activity or own any assets. They will be different depending on whether the foreigner is considered a resident or non-resident. The main Spanish taxes are IRPF, IRNR, Wealth Tax, Inheritance and Gift Tax, Capital Gains Tax, taxes when buying a home and VAT.

Further information

This article is part of our service Taxes in Spain for foreigners. Visit this section where you will find all the useful information on this topic, including a complete guide Taxes in Spain for non-residents and foreigners.

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