Taxes

Taxes in Spain

Spain's tax system is progressive and complex, but the Beckham Law provides significant advantages for eligible expats. Understanding your tax obligations is crucial.

Tax Residency

You're a Spanish tax resident if:

• Spend 183+ days in Spain in a calendar year
• Your center of economic interests is in Spain
• Your spouse and minor children reside in Spain

Tax residents: Pay tax on worldwide income

Non-residents: Pay tax only on Spanish-source income

Income Tax Rates (IRPF)

Standard progressive rates (2026):

Regional surcharges: Autonomous communities add 0-3% additional

Beckham Law (Special Tax Regime)

Major tax benefit for expats:

• 24% flat rate on Spanish-source income up to €600,000
• 47% on amounts over €600,000
• Foreign income completely exempt from Spanish tax
• Available for up to 6 years

Eligibility requirements:

• Not lived in Spain for previous 5 tax years
• Moved to Spain for work purposes
• Must apply within 6 months of starting work/Social Security registration

Who qualifies:

• Employees with employment contract
• Remote workers with digital nomad visa (employment contract required)
• Highly skilled professionals in innovation/R&D
• Entrepreneurs with innovative projects
• Sports professionals (special rules)

Who doesn't qualify:

• Freelancers/self-employed (unless highly skilled/innovative)
• Digital nomads as contractors (must be employees)
• Passive income recipients

Savings:

• On €60,000 income: Save ~€8,000/year vs standard rates
• On €100,000 income: Save ~€18,000/year
• Foreign investments, rental income: Not taxed in Spain

Social Security Contributions

Employees:

• Employee: ~6.4% of salary
• Employer: ~23.6% of salary
• Total: ~30% (but employer pays majority)

Self-employed (autónomo):

• Flat rate: €80/month (first year, 2026)
• Then based on income: €300-500/month typical
• Includes healthcare, pension

VAT (IVA)

Rates:

• Standard: 21% (most goods/services)
• Reduced: 10% (food, transport, hotels, restaurants)
• Super-reduced: 4% (basic foods, books, medicine)

Digital nomads: May need to charge IVA if providing services to Spanish clients (though limited to 20% income)

Annual Tax Return (Modelo 100)

Filing deadline: April-June each year

Required if:

• Income over €22,000 from one employer
• Income over €15,000 from multiple employers
• Self-employed
• Rental income
• Capital gains

Process:

• File online via Agencia Tributaria website
• Or visit tax office in person
• Hire gestoría (€200-500) recommended

Foreign Asset Reporting (Modelo 720)

Controversial requirement:

• Must report foreign assets over €50,000
• Includes bank accounts, securities, real estate
• Very strict penalties for non-compliance
• Deadline: March 31
• Constitutional court ruled excessive penalties disproportionate (2024)

Recommendation: Comply, hire professional to file

Wealth Tax (Impuesto sobre el Patrimonio)

Applies to assets over:

• €700,000 exempt (€1M for primary residence in some regions)
• Rates: 0.2-3.5% depending on amount and region
• Many regions eliminated or reduced this tax
• Madrid: No wealth tax

Capital Gains Tax

Rates (2026):

• Up to €6,000: 19%
• €6,001-€50,000: 21%
• €50,001-€200,000: 23%
• Over €200,000: 27%

Applies to:

• Sale of stocks, crypto
• Sale of property (after exemptions)
• Some rules for reinvestment

Tax Treaties

Spain has tax treaties with 100+ countries including:

• US, UK, Canada, Australia
• Most EU countries
• Prevent double taxation
• May reduce withholding on foreign income

Hiring a Gestoría

Recommended for:

• First-time filers
• Complex situations (multiple income sources)
• Beckham Law applications
• Modelo 720 filing
• Business taxes

Costs: €200-500 for annual return, €500-1,500 for Beckham Law application

Regional Variations

Significant differences by autonomous community:

• Madrid: No wealth tax, favorable
• Catalonia: Higher taxes
• Basque Country: Different system
• Canary Islands: Special tax zones (ZEC)