Expat Tax Advice in Spain

You are considered tax resident in Spain if you meet one of the following criteria:

• You are in Spain for more than 183 days in a calendar year
• Your family, spouse (unless legally separated) and/or dependent children are resident in Spain, even if you are in Spain less than 183 days
• Spain is the main center (directly or indirectly) or base of your activities or economic interests, directly or indirectly.

Once you meet the criteria for tax residency, you must submit at least one annual tax return (RENTA or 100 Form).

The first principle of taxation is that income (pensions, salary, capital gains, savings etc.) are always taxed in the country of receipt. However, some people live and work in different countries. Others receive income (pensions, interest etc.) in one country, but live in another.

The second principle of taxation is that if you are considered tax resident in a country, then you will be subject to the tax laws of that country, and be subject to taxation on your income and assets. It is possible therefore to receive income which is taxed in one country, which is also liable to tax in another. A number of countries tax residents on their worldwide income and assets.

Consequently, in 1963, the Organization for Economic Co-operation and Development (OECD) published a draft model (double taxation agreement (DTA) which was intended to form the basis of double taxation agreements between member countries.

The purpose of this was to ensure that even though income could be taxed in both countries, the agreements were designed to ensure that credit was received for the tax already paid. The model has been revised a number of times.

Do not hesitate to contact us for further information.