Do I have to file income tax returns in Spain?
We have recently read the following statement in a foreign newspapper in Spain: The general rule is that anyone who is physically present in Spain for more than 182 days in a year (the Spanish tax year is the same as the calendar year) is considered to be tax resident in Spain, and therefore needs to submit an annual Spanish residents’ tax return (Declaracion de la Renta). Fortunately, that is not correct.
Not everyone has a duty to file income tax returns in Spain
Before providing a list of situations where you need to file income tax returns in Spain, the following clarifications may be provided. It should be borne in mind that full pay is considered, inter alia, wages, unemployment benefits and certain social security pensions.
Having said that, let’s see in what situations you have to file income tax returns in Spain:
If you earn more than 22,000 euros per year
If your salary exceeds this amount you must submit the declaration, regardless of the number of payers or places in which you have worked.
If you earn less than 22,000 euros and you have a single payer
In that case, as a general rule, you have no obligation to file income tax returns, although it is possible you would benefit from it.
If you have multiple payers
That is, if you have received incomes from different companies or organizations, you should first write down the companies for which you have worked and what you have perceived from each one of them, in order from lowest to highest incomes.
If your incomes from the second and subsequent companies do not total more than 1,500 euros in the past year, the minimum limit to make the declaration is 22,000 euros, so you will have no obligation to file the declaration.
On the other hand, if the income of the second and subsequent companies exceeds 1,500 euros in total, the income limit decreases to 12,000 euros, so you do charge more than 12,000 euros annually you must file income tax return in Spain.
If you earn more than 12,000 when
You receive any compensatory spousal pensions, annuity pensions (except those paid by the parents by judicial decision), when the payer of the income is not obliged to withhold (for example, foreign pensions) or when income from work is subject to fixed types of retention.
In these cases you will have the obligation to file income tax return if you exceed that limit of 12,000 euros.
It will also be mandatory for those…
Who exceed, in general, 1,600 euros of income obtained by incomes from movable capitals (account interest, stock dividends, etc.) and equity gains (for the transfer of assets, shares, investment, etc.).
Also, you will be obliged to make the declaration when real estate incomes (second non-rented housing, etc.) and/or treasury bills yield or subsidies for the purchase of public housing exceed 1,000 euros per year.
In addition, you will be obliged to declare if you are entitled to deduct investments in housing, international double taxation (see bellow) or who make contributions to protected estates of persons with disabilities, pension plans, insured pension plans or social security mutual funds, corporate social security schemes and dependency insurance that reduce the tax base, when exercising such a right.
What is the International Double Taxation?
The International double taxation is subjecting direct to the same tax and taxable materials for the same period of time, by the public authorities from different countries.The advent of double taxation is due to the manner in which criteria are applied to the taxation of income or wealth.
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I am a pensionist retiring to Spain
You will not be required to file income tax returns if your pension is not bigger than 22,000 euros.
However, this limit can be decreased to 10,000 euros if you have multiple payers or pensions according to the previous criteria.