Home » Spain » Taxation » Investment Taxation for Expats in Spain

Investment Taxation for Expats in Spain

Submitted: April 2014

Taxable income in this category includes:

Interest

For a tax resident, interest income in Spain generally has a withholding tax of 21% deducted at source (figure includes a 2% supplementary charge for 2014). Interest income must be reported with all your other savings income on your tax return. Any excess tax due (after withholding tax) will be taxed at the marginal rate. As a resident, you will also have to pay tax on interest received from other countries, and may be subject to withholding taxes in the country of origin. If the country of origin of the interest payments has a suitable tax treaty with Spain, the amount of tax that can be charged by the country of origin is generally reduced to 10%. From 1 January 2012 until 31 December 2014, a supplementary charge is levied on interest income at rates of 2%, 3% or 6%, depending on the taxpayer’s overall level of investment income.

For a non-resident, interest income in Spain is subject to withholding tax at a flat rate of 21%. If you have grounds for claiming a refund, a form 210 must be filed after 1 February of the following tax year. However, generally you will not have to pay tax on interest from other countries (unless they are on the Spanish tax haven list), though you may be subject to withholding taxes in the country of origin. If the country of origin of the interest payments has a suitable tax treaty with Spain, the amount of tax that can be charged by the country of origin is generally reduced to 10%.

Rental income

For a tax resident, rental income is taxed as normal income and must be reported on your annual tax return. The taxable amount is calculated after deducting expenses/costs from the gross rental income to produce the net rental income, if the property is a dwelling, only 50% of the net rental income is taxable. The range of expenses/costs that can be deducted is very generous in Spain. As a resident, you will also have to pay tax on rental income from outside Spain, and may be subject to withholding taxes in the country of origin.

For a non-resident, rental income can be reported each time it is received, but is generally reported quarterly using a form (modelo 210). The taxable amount is calculated after deducting certain expenses/costs from the gross rental income, to produce the net rental income, which is taxed at a flat rate of 24.75%.

Under certain circumstances, tenants are required to withhold a portion of the rent and pay it directly to the tax authorities.

Dividends

For a resident, dividend income in Spain generally has withholding tax of 21% deducted at source (figure includes a 2% supplementary charge for 2104). It must be reported with all your other savings income on your tax return. Any excess tax due (after withholding tax) will be taxed at the marginal rate. You will also have to pay income tax on dividends received from other countries, and may be subject to withholding taxes in the country of origin. If the country of origin of dividend payments has a suitable tax treaty with Spain, the amount of tax that can be charged by the country of origin is generally reduced to 15%. From 1 January 2012 until 31 December 2014, a supplementary charge is levied on dividend income at rates of between 2%, 3% or 6%, depending on the taxpayer’s overall level of savings income.

For a non-resident, dividend income in Spain has withholding tax of 21% deducted at source. If you have grounds for claiming a refund, a form 210 must be filed after 1 February of the following tax year. You will not have to pay Spanish tax on dividends from other countries; though you may be subject to withholding taxes in the country of origin. If the country of origin of the dividend payments has a suitable tax treaty with Spain, the amount of tax that can be charged by the country of origin is generally reduced to 15%.   

Capital gains

For a resident, capital gains are taxed as savings income and must be reported on your tax return. Certain capital gains have withholding tax of 21% deducted at source (figure includes a 2% supplementary charge for 2104). These include gains on the sale of shares and certain gambling winnings. You will also have to pay income tax on capital gains made in other countries. From 1 January 2012 until 31 December 2014, a supplementary charge is levied on capital gains at rates of 2%, 3% or 6%, depending on the taxpayer’s overall level of savings income. From 1 January 2013 tax on capital gains from assets held for less than 1 year are subject to income tax at the marginal rate. The is no capital gains tax payable on the sale of a taxpayer’s main residence provided the total gain is reinvested in a new residence. 

For non-residents, certain capital gains are subject to withholding tax. For example, 3% of the sale price must be withheld by the purchaser of real estate from a non-resident. This is credited against any tax liability which arises for capital gains made on the sale of the real estate. Additionally, withholding tax is applied on capital gains derived from the disposal of shares in non-listed collective schemes. If you win a lottery prize of more than EUR2,500 it will be subject to a withholding tax of 20%.

 

 



Moving to Spain

If you are considering moving to Spain or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Spain section including; details of immigration and visas, Spanish forums, Spanish event listings and service providers in Spain.

picture1

Living in Spain

From your safety to shoppingliving in Spain can yield great benefits as well as occasional drawbacks.  Find your feet and stay abreast of the latest developments affecting expats in Spain with relevant news and up-to-date information.

picture1

Working in Spain

Working in Spain can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Spain, and general Spanish culture of the labour market.

picture1

 

Spanish Expat News Headlines

Spanish Expat Service Providers

Expatriate Healthcare 1st Move International Global Tax Network (GTN) Expat Financial Mieu Phan Coaching

Spanish Expat Tools