Tax private clients

Spain has a magnetic attraction not only for international companies, but also for individuals from all over the world. In addition to the classic investment in a property on the coast, where to spend vacations and enjoy a golden retirement, in recent years there has been an unstoppable trend to live and work from Spain, reinforced by globalization and digitalization and embodied in the home office. Both in one constellation and in the other, residents and non-residents have different tax obligations in Spain, in the compliance of which we provide them with our expert advice.

Income Tax

Individuals who are tax residents in of Spain, which in principle are all those who reside more than 183 days a year in Spain, are subject to Personal Income Tax by personal obligation, that is, they must pay tax in Spain on their worldwide income, regardless of the place of its generation. Those taxpayers with income from several countries or whose situation has other international elements (e.g. posted workers) must pay special attention when taxing in Spain, in particular to avoid double taxation.

Beckham Law

Spain has a highly attractive tax regime for workers posted to Spain for work purposes. The main tax advantages consist of taxation of earned income at a flat rate of 24%, for income up to €600,000, as well as taxation for Wealth Tax by real obligation, i.e., limited to assets located in Spain. The application period is six months and the benefits can be extended up to a maximum of six years.

Wealth Tax

The Wealth Tax is a fiscal peculiarity of Spain, since there are very few countries in our environment vicinity that apply it. The tax is levied on the net wealth of individuals as of December 31 of each year, if it exceeds the minimum exemptions (€700,000 as a general rule). There are large regional differences, as some Autonomous Communities have de facto repealed abolished the tax, with 100% exemptions, while others have reduced the minimum exemptions. Non-residents of Spain are only taxed on assets located in Spain. Both those with high (business) wealth and non-residents owning high-value real estate in Spain can optimize their tax burden with the appropriate planning.

Inheritance and Gift Tax

Taxation in case of inheritance or donation can be very high in Spain. Whether what our loved ones receive (in life) is a private estate, or if it is a question of passing on a company, it is important to know the rules of Inheritance and Gift Tax applicable in each region and take advantage of exemptions and other tax benefits to reduce the tax burden as much as possible and ensure that the transmission of our wealth to the next generation is completed in the simplest way possible.

Form 720

Individuals resident in Spain are required to file Form 720, consisting of an informative declaration of assets and rights located abroad. It is filed between January 1 and March 31 of each year and provides for four categories of assets and rights on which there is an obligation to report: real estate, bank accounts, securities or insurance and cryptocurrencies. The correct completion of the model requires careful preparation, given its complexity, and also to avoid penalties that may be imposed in case of defective or incomplete reporting.

Allocation of fictious real estate income

Owners of non-rented holiday homes must pay tax on them annually to the Spanish State as imputation of fictious real estate income or value, even if they have been empty all year. For this purpose, non-residents in Spain must file an online declaration using form 210 during the following year. In the case of partial leasing, tax is only paid proportionally for the days in which the property has not been leased.

Sale of vacation properties

Any transfer of a property located in Spain, whether onerous (sale) or lucrative (donation), gives rise to the obligation to file various tax returns and, where applicable, to pay the resulting taxes. It is essential to know in advance the tax burden associated with such transfers in order to be able to plan them properly and reduce the tax bill as far as possible, in accordance with the regulations in force at any given time and place in Spain.

Owners of non-rented holiday homes must pay tax on them annually to the Spanish State as imputation of income, even if they have been empty for the whole year. For this purpose, non-residents in Spain must file an online declaration using form 210 during the following year. In the case of partial leasing, tax is only paid proportionally for the days in which the property has not been leased.

Leasing of vacation properties

Owners of a vacation property in Spain who do not reside in the country and who rent such property, either year-round or temporarily, must declare in Spain their rental income and pay tax on it under the terms of the Non-Resident Income Tax Law (IRNR). The declaration is made by means of form 210.

In Lozano Schindhelm we advise you in your language. In all Spain. And backed by our experience of more than 15 years as leaders in international tax advice for residents and non-residents.

Corporate clients

At Lozano Schindhelm we also provide tax advice to companies with commercial activities in Spain or a presence in our territory, typically in the form of a subsidiary or permanent establishment. Our tax advisors offer you a comprehensive service ranging from accounting, to the filing of tax returns, the payroll processing and the preparation of annual accounts, etc.