Even if you are non-resident in Spain, you may be liable to pay certain taxes. This guide provides an introduction to tax in Spain for non-residents, but having tax obligations in multiple countries can become very complicated, so we strongly recommend you seek assistance from a legal or financial professional.
Income tax in Spain for non-residents
People who are classes as non-resident in Spain for tax purposes (i.e. spending fewer than 183 days in a one-year period in Spain) are subject to Spanish income tax on all the income (including imputed income—see below, “property tax in Spain for non-residents) earned in Spain. You will need to apply with the tax agency, Agencia Tributaria, in your first tax year using your NIE identity number and filling out form Modelo 30.
Tax rates in Spain for non-residents
The tax rates in Spain for non-residents depend on the type of income that is earned and the nationality of the taxpayer. You may also be required to pay regional taxes on top of the national tax, which vary by autonomous community.
General earned income is taxed for non-residents at a flat rate of 19% for EU/EEA citizens or 24% for non-EU citizens. Investment interest, dividends and capital gains (such as a profit on a real estate property sale) are taxed at 19%. Pensions are taxed on a progressive scale ranging from 8% to 40%.
Property tax in Spain for non-residents
If you own real estate property in Spain and are non-resident, your Spanish property is considered not to be your primary residence and thus is subject to property tax, as well as income tax regardless of whether you are actually earning rental income from the property. If you are not renting out your home, this is considered imputed income.
First, you will need to pay Impuestos sobre Bienes Inmuebles (IBI) tax, which is a local property tax or council tax calculated from the home’s cadastral value, as determined by the municipality, at a rate that varies by province, ranging from 0.405% to 1.166%.
Second, you will need to pay income tax on rental income you are bringing in from the property, or, if you are not renting it out, imputed income. For rental income, the tax base is the net rent minus allowable expenses. For imputed income, the tax base is 2% of the home’s cadastral value. In both cases, the income is subject to the same income tax rates for other earned income: 19% for EU/EEA citizens, and 24% for everyone else.
Inheritance tax in Spain for non-residents
Inheritance tax in Spain for non-residents follows the national scheme as you must be a habitual resident in a given region to use their regional inheritance tax. As a non-resident, you are liable for Spanish inheritance tax if you are receiving property in Spain or receiving a payout from a life insurance policy from a Spanish insurer.
Calculating inheritance tax in Spain is quite complicated, as it depends on the heir’s relationship to the deceased and the amount of the inheritance. Different categories of relatives are given a fixed allowance which is tax-free. After that, the remaining amount is taxed on a staggered scale. Finally, that total amount is multiplied by a tax multiplier that depends, again, on the relationship between the heir and the deceased.
For example, for a €40,000 inheritance to a surviving spouse, the spouse is entitled to a tax-free allowance of €15,956. The remaining €24,044 is taxed at staggered rates, with the first €7,993.46 taxed at 7.65%, the next €7,987.45 at 8.50%, the next €7,987.45 at 9.35%, and the remainder of €75.64 at a rate of 10.20%. The spouse is a Group 2 relative with a tax multiplier of 1.000, so the sum of the staggered amounts is equal to the amount of tax due.
If the relative was a sibling instead of a spouse, they would be a Group 3 relative, with an initial tax-free allowance of €7,993 and a tax multiplier of 1.5882. This means that the sum of the staggered tax amounts would be multiplied by 1.5882 to determine the total tax due.