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International Taxation
Overwhelmed by Spanish Taxes? Let's Talk About It!
✔︎ Tax Diagnosis: detection of risks
✔︎ Thinking of retiring in Spain and becoming a Spanish Tax resident. We will provide you critical guidance about the taxes you will have to pay
✔︎ You are investing in Spain and need to understand your tax obligations when you invest, during the investment and when you sell it.
✔︎ Your Company is relocating in Spain and you want to know about the tax status if you come to live and work in Spain.
Technical steps in Spain:
A Non-resident that would set up a company in Spain must analyze the convenience from tax point of view to do it through a branch in Spain of the company owned in his country or a as direct shareholder.
The dividends obtained from a Spanish Company are liable to Non-Resident Personal Income Tax.
A Non-resident who becomes Tax Resident in Spain for retirement will have the following tax obligations:
Pensions or other similar remunerations being received in consideration of past employment shall be liable for Spanish Personal Income Tax. But it’s important to check if exists an Agreement signed between Spain and the country which the pension comes from.
Income Tax for the Worldwide Assets
Tax will have to be paid in Spain, regardless where the assets are based
A Non-Resident who invests in Real Estate in Spain would be liable to:
Non-Resident Personal Income Tax A taxpayer who rents an urban building in Spain, is subject to Non-Resident Personal Income Tax for the pro:t obtained. Note that only the European citizens are allowed to deduct the expenses related to the rental income. Also, if the property is used for the Buyer’s own use they are subject to Non-Resident Personal Income Tax for the charged income established by law.
Property Tax (IBI Impuesto sobre Bienes Inmuebles) is a local (municipal) tax charged by the town hall “Ayuntamiento” that must be paid by every year by the owner. Based upon the cadastral value of the property.
Tax on the Increase in Value of Urban Land: “The plusvalía “is a local (municipal) tax charged by the town hall “Ayuntamiento” on properties when they are inheried or sold. The base for this tax is the cadastral value (an administrative value) of the property and the number of years that have passed since the property last changed hands.
Inheritance Tax: A nonresident that inherit a real estate in Spain is liable to the Spanish Inheritance Tax. In Spain, this tax varies depending on the relationship to the deceased and the region where the properties is located. The procedure would be different if exist or not a Spanish will
FAQ
How do I start when I want to relocate my company in Spain? Can you help me to plan the Tax implications?
We will help you identify your Tax obligations, and will plan a strategy to mitigate them.
Although I own a property in Spain for my own use, am I obliged to submit any tax return in Spain?
Yes, every year you must submit a tax return for the charged income corresponding to these real estates. The taxable base must be calculated as 1.1% or 2% of the cadastral value of the building.
Is there any tax allowance if I inherit a company located in Spain?
Yes, almost all the regions in Spain (“Comunidades Autónomas”) establish a 95% reduction applied to the value of the shares of a Spanish Company, always that all the requirements are fulling, reducing considerable the taxable base of the Inheritance Tax. This is one of the reasons to have a good inheritance tax planification.
Is a Spanish company that owns and rents real estate allowed to deduct the expenses related to the rental income?
Yes, the Spanish company can discount the expenses in order to calculate its profit.
