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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 1314. Becoming a Spain tax resident?
31 July 2015 @ 13:45

Should I become a Spanish resident?

 

This question is essential for the enjoyment of some benefits and very especially for the ascertainment of your taxes liabilities.

Actually many laws in Spain apply the “fiscal residency concept” to classify the residential status of persons for other purposes

For any European citizen, the acquisition of the Spanish residency is very simple: you just need to register yourself at the National Police station through a very simple process (previous   appointment) and pay a small fee of around 10 euros.

If you don't have Spanish citizenship, you're a resident if either:

o    You stay in Spain for more than 183 days (including sporadic absences and day traveling in and out of Spain).

o    The main base of your professional activities or economic interests is in Spain.

o    Your spouse and minor age children reside in Spain.

 

What are the benefits for residents in Spain?

                                                                              

 

Tax benefits

 

• In Capital Gains Tax: From 2015 on, residents in Spain are exempt of capital gains if- as always- they sell their first residency and reinvest in first residency within two years or...) and this is NEW!

 

You are over 65 years old and:

a) Sell your first residency even if you do not reinvest in first residency again.

b) Sell any real estate asset and invest these funds in a life annuity as a complement of your pension, with a maximum limit of 240.000 euros

 

• Lower Income tax burdens: as in Spain the rates are lower than in most of northern European countries.

Health System benefits

Health system in Spain is universal, which means that everyone (national or foreigner) has rights to basic an urgent health services

Residents contributing to the Spanish Social Security system or a UK National Spanish resident receiving a UK state pension, will have rights to all the services of the Health system under same conditions as Spanish nationals.

What are my obligations as Fiscal resident?   

 

The main obligation if you become a resident is that of submitting your world-wide incomes to the Spain treasure.

Most countries in northern Europe have now higher income tax rates than Spain . As a consequence,  the income levels for the higher tax rates start lower in Spain than in other countries.

Obligation of informing of all assets worldwide ( 720 form)

If you are a Spanish resident, you need to have a Spanish registered car and a Spanish driving license, unless you have got an European driving card.

 

 


 



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6 Comments


LEEANNE said:
01 August 2015 @ 09:40

Can you please give me more info about residents selling main residency property & re-investing?.....
If we don't re-invest, how much do we pay?
If we do re-invest, what % must we re-invest?
Do we have to pay capital gains first, on selling, & it gets re-imbersed to us at a later date?...if so, when & how?
Thank you.


harddunby said:
01 August 2015 @ 09:46

With both France and Spain it's easy to enter the system but your liabilities are much more complicated to discharge should you wish to leave.


SheilaW said:
01 August 2015 @ 11:17

What many expats refuse to believe is that if you really move your base to another country then you will probably have no choice but to become fiscally resident there. Since leaving the UK I've lived in the Netherlands, France and Spain, and I've lost count of the numbers who think they've somehow beaten the system, found a loophole... when in fact they're simply living as illegal immigrants. Funny really, when you hear some of them ranting about immigration having ruined their home country.


DJF42 said:
01 August 2015 @ 11:34

SheilaW, how so very right you are.

I am in the minority amongst the Brits I know when I call myself an immigrant not an expat and I know I could denounce at least 50% of them for, "flying under the radar".

All Spanish departments and their computer systems are becoming more and more sophisticated and efficient so they will have their come comeuppance in the not to distant future


miketait1 said:
01 August 2015 @ 13:14

There's some confusion about the difference between what used to be called " residencia" and being tax resident.i believe the former is a requirement for stays of over 3 months but the latter is linked to the 183 days a calendar year rule and requires a tax return by the end of June in the year after the period of residence.

Registering as a resident is not as simple as suggested: we needed a Spanish translation of our health insurance before we were even considered( cost €450
as only an " official " translator would do. )It also took two appointments and a
wait of over 4 hours!

The whole process seemed designed to put us off even though we hired a Gestor to help.It would have been far easier to " fly under the radar" like so many others but we persevered!


MJMR said:
01 August 2015 @ 17:53

I'm a tax resident of Spain and would be grateful if you could tell me the CGT laws on capital gains made from UK equities. Is there, for example, a CGT allowance as there is in England.
Many thanks


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