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Law in Spain

Law in Spain is a dedicated Blog to advise British Expats living in Spain about their legal issues through the expertise of Abad Abogados lawyers. The main purpose of this blog is helping Expats to find useful and updated legal tips to deal with Spanish Bureaucracy.

Do you need to submit a Spanish tax return?
21 April 2015

Spanish Tax Returns


Once again the time of year has arrived for your tax returns to be prepared. We have put together the following information to help you decide if you need to submit one...

Firstly,and most importantly, you need to be aware that the deadline for presentation of the 2014 return is 30th June 2015. If it results in you having to pay tax, you can split the amount into two payments, with the first due on 30th June 2015 and the second on 5th November 2015. Payments by direct debit must be set up by 25th June 2015 at the latest.



Income Tax in Spain


Looking at the Income Tax return itself, it is a direct tax levied on the income of resident individuals. The return, knows as “la Renta”, is normally prepared once a year and must include: salaries/earnings; income obtained from employment or self-employment, any other earned income; interest and pensions etc, and any income derived from properties and investments; rental income and dividends etc. The individual’s entire worldwide income has to be included, not just that arising in Spain. However, foreign tax credits may be used if the income has already been subjected to tax, avoiding double taxation - this means that you won’t end up paying twice!



Resident Tax in Spain


Under Spanish Law individuals are considered as resident for tax purposes if they spend more than 183 days in a calendar year in Spain or if the their business, professional or economic interests are based in Spain. Additionally, a presumption of residence arises if an individual’s family lives in Spain. These people are considered as resident for tax purposes, even if they have not obtained their residency permit.


For those with simple tax affairs, the most common way of completing the filing obligation, is to request a "BORRADOR" (draft) tax declaration. This is automatically generated by the tax office (AEAT) from their systems which contain details of employment, bank and other records, so they know what most people are due to pay. The draft return does not include any income that comes from outside of Spain i.e. your UK State Pension, Private Company Pensions, etc. If you have such income you cannot submit a Borrador because it would not be correct and you would be making a false declaration.



Who needs to file a tax return?



If you are resident (as described above), you will need to consider the following to determine if you need to file a tax return for 2014 here in Spain:



  • If you are in legal employment you will normally be paying the Spanish equivalent of PAYE. If your income is under €22,000 and from just one source you are not obliged to declare it but it may be advantageous to do so, as there may be allowances that you are entitled to claim.

  • If your income (such as from a pension) is less than €11,200 you do not need to declare it unless you have more than one source of income and the second and subsequent incomes exceed €1,500. Two pensions would count as two sources of income even though you add them together on your declaration.

  • If you have investment income of more than €1,600 you must declare it.

  • If your total income from all sources is less than €1,000 you do not need to declare it.

  • If you are self-employed or running a business you will have to make a declaration irrespective of what your level of income is.


Despite all the tax reporting requirements, Spain actually remains a tax efficient country for British expatriates. We recommend that you always take specialist advice and that a full review of your assets is carried out now to ensure that they are working for you in a tax efficient manner.



We here at Abad Abogados would welcome the opportunity of advising and assisting you in all your tax affairs – why not contact us now to make an appointment? 


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