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Taxes on Foreigners in Spain

Taxes on Foreigners in Spain

6. Income tax (Impuesto de la Renta)

Any foreigner resident in Spain must make an Income Tax return for personal obligations and on his world wide income. If you reside more than 6 months per year in Spain, you are considered a tax resident even if you have not taken a residence permit. However, certain types of income (like public pensions for complete and permanent invalidity) are exempt from Income Tax in Spain, and there are tax agreements between a number of countries and Spain, defining in which country to pay which taxes.

The tax rates at present (fiscal year 2001) goes from 18 to 48%. Income under 7.813 Euro is exempt and under certain conditions, if you have an income of less than 21.000 Euro, you are also exempt from paying income taxes. From 2003 the tax rates will be lowered.

A non-resident property owner must pay income tax on the letting value of his dwelling, even if he does not rent it out. The letting value is calculated as 2% of the fiscal value (valor catastral), and a non-resident pays 25% tax on this every year.

You will not yet get a bill for the income taxes in Spain, but must present the declaration yourself, or use a tax representative. For the non-resident, tax representative is obligatory, if he does not accept to have communications directed to his property in Spain.

The period for presenting the declaration for the preceding tax year (same as calendar year) is May-June each year for fiscal residents, and during the year for non-residents.

 

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