Guide to Taxes in Spain for Foreigners

If you are a foreigner planning to live, work, or invest in Spain, it is essential to understand the country’s tax system. Spain has different tax rules depending on whether you are a resident or a non-resident, and it is crucial to comply with these regulations to avoid legal issues and unexpected costs.

1. Resident vs. Non-Resident Tax Status

Your tax obligations in Spain depend on whether you are considered a tax resident or non-resident.

• Tax Residents: you are considered a tax resident in Spain if you spend more than 183 days in Spain in a calendar year, if your main economic interests (e.g., business, investments, or work) are in Spain, or if your spouse or dependent children live in Spain. Tax residents must pay tax on their worldwide income.
• Non-Residents: if you do not meet the above criteria, you are considered a non-resident and only pay tax on income generated in Spain.

2. Income Tax in Spain

For Tax Residents: Personal Income Tax (IRPF). Spain has a progressive income tax system, meaning the more you earn, the higher your tax rate. The general rates (as of 2024) are:

• Up to 12,450 — 19%
• 12,451 — 20,200 — 24%
• 20,201 — 35,200 — 30%
• 35,201 — 60,000 — 37%
• 60,001 — 300,000 — 45%
• Over 300,000 — 47%

For Non-Residents: Non-Resident Income Tax (IRNR)

• Employment income: flat rate of 24% (or 19% for EU/EEA residents).
• Rental income: 24% on gross income (EU/EEA residents can deduct expenses).
• Dividends, interest, and capital gains: 19%.