Tax Liability in Spain for Spanish Dual Citizens

Many Spanish dual citizens living in Spain or the EU—especially those working to become full citizens—often wonder if they owe taxes the country. Another common question is if they owe taxes their home country (often the USA), as well.

It’s not an extremely simple answer and depends on your specific financial and tax situation.

It breaks down into two parts:

• How do taxes in Spain work?
• Do I have to pay taxes if I live in Spain?

We’ll start by helping clarify if you need to pay taxes in Spain at all.

Do I Have to Pay Taxes in Spain?

Owing taxes in Spain has to do with the specific types of income you have and the wealth you own. But, the exact rate is determined by your “tax residency”.

We’ll go through the steps one by one.

Spain Tax Residency

If you owe taxes, you’ll now need to find out if you are a tax resident—this will determine how you calculate taxes. To be considered a tax resident, you’ll need to meet at least one of the three following eligibility requirements:

1. Spend over 183 days in Spain during the calendar year
2. Have a business (or other economic interest) in the country
3. Have a spouse or underage child who is a tax resident (and you aren’t a tax resident in a different country)

If you meet one of the above, you’ll be taxed as a resident.

How Do I Calculate Spanish Taxes?

So, you’ve determined if you are a resident or not. Now, you can check the relevant subsection to determine what you owe.

Tax Rate for Non-Residents

If you are not a tax resident, you’ll need to pay a flat tax rate on all your income that comes from Spain. That rate is:

• Non-EU/EEA Citizens: 24%
• EU/EEA Citizens: 19%

Tax Rate for Residents

Residents are taxed using progressive rates. Note that many people do not calculate tax brackets correctly. Below, you’ll see up to €12,450 is taxed at 19%. That means no matter how much you make, the first €12,450 will always be taxed at 19%. Moving up in a tax bracket simply means the additional money is taxed at a higher rate, not all of your money.

Note for Autonomous Communities

Autonomous communities in Spain can adjust their tax rate, so make sure that you understand the local rules.

What Income Do I Owe Taxes On in Spain?

The following list includes all taxable income in Spain:

1. Employment income: Wages, salaries, bonuses, and fringe benefits—from Spanish and foreign employers—must be reported.
2. Self-employed income: If you are a freelancer or business owner, your net profits are taxable. (If you earn enough, your business might owe Value-Added Tax.)
3. Rental income: All rental income minus maintenance and mortgage interest will be taxed.
4. Global assets: The Modelo 720 form reports assets held abroad.
5. Capital gains: These are taxed at 19% for non-residents. For residents, you have three progressive brackets.
   1. Up to €6,000: 19%
   2. €6,000 to €50,000: 21%
   3. Over €50,000: 23%
6. Estate and gifts: Whether you are a resident or not, you’ll owe for inheritances and gifts according to a progressive system.

Wealth Tax in Spain

Spain imposes a Wealth Tax (Impuesto sobre el Patrimonio) on individuals whose net worth exceeds a certain amount. This is based entirely on net wealth—combining property, savings, and luxury items.

There are regional differences, and you don’t owe anything on the first €700,000 (you are exempted another €300,000 for each primary resident you live with).

Below are the wealth tax brackets without any adjustments for local particulars.

Social Security

Expats working in Spain must contribute to Seguridad Social (Spanish Social Security). These contributions cover healthcare, unemployment benefits, and pensions. These are split between employer and employee.

You can get this rate reduced (or even totally exempted) in situations where Spain and your home country have a social security agreement.

How to Avoid Overpaying Spanish Taxes

Below, we highlight two main ways to avoid overpaying when it comes time to file.

The Beckham Law (for Expats with High Incomes)

If you are a newly arrived expat to Spain, it’s always worth seeing if you qualify for the Beckham Law (Régimen Fiscal de Impatriados). You’ll get:

• A flat tax rate of 24% on Spanish income up to €600,000
• Exemption from paying taxes on income from abroad
• For up to 6 years

To qualify, you must:

• Be a non-resident in Spain for at least 10 years
• Relocate to Spain for work (not self-employment)
• Apply within 6 months of starting your employment

This regime is especially popular among high-income earners. However, it excludes income from real estate or investments in Spain.

Double Taxation Agreements (DTAs)

Spain has signed Double Taxation Agreements (DTAs) with many countries. These DTAs prevent you from paying taxes twice on the same income—so they are well worth understanding.

In particular, expats from the United States and the United Kingdom can offset taxes paid abroad against their Spanish liability.

Claim DTA benefits by:

• Getting a Certificate of Fiscal Residency from your home country
• Complete your application with Hacienda
• Provide evidence of taxes paid abroad

If you are an American, the US tax treaty with Spain gives very clear rules. You’ll also be given tax deductions and credits like:

• Foreign Tax Credit
• Foreign Housing Deduction (or Exclusion)
• Foreign Earned Income Exclusion (FEIE)

Spanish Tax Deductions

Spain’s tax deductions are pretty generous. They include costs related to:

• Maternity leave
• Foreign taxes
• Pensions
• Business activities
• And many more…

Make Taxes Easier—Become a Spanish Citizen

The best way to make your taxes easier is to become a full Spanish citizen! The best way to do that is to work with SDC. Our expert team helps thousands of people a year navigate the process of becoming a Spanish national.

Then, when tax time rolls around, you’ll have a much easier time!

Book a free call with us to get started.

Spanish Taxes for Expats FAQ

When are taxes due in Spain?

The tax deadline is June 30th.

Do I have to pay taxes in Spain if I’m not a citizen?

If you live in Spain, spend a lot of your year there, own property there, or run a business, chances are you owe taxes—even if you aren’t a citizen.