Must you make a resident tax declaration in Spain?

Taxes Wed, 26 Feb 2014
Must you make a resident tax declaration in Spain?

Do you enjoy sudoku? Are you one of those people whose coffee table is piled high with completed, half completed and ready to complete puzzle books? Working with numbers is absorbing; it can also be frustrating at times. When you are locked in battle with a particularly difficult sudoku grid, they have the upper hand. At other times, numbers can be open to misinterpretation, twisted and cajoled into telling whatever tale you wish.

What has this to do with who should make a resident tax declaration in Spain? This is one of those areas where numbers have simply added to the confusion rather than clarifying it. The issue of who should present a resident tax declaration has been rather confused over the years by the publication of the figure, 22,000€ as a threshold.

Some people have been led to believe that if your income is less than this you do not have to make a declaration. This is not the case. You are only exempt from paying the 22,000€ figure if you are employed by only one employer and are already paying Spanish withholding tax as you earn. A situation that applies to very few expats.  

So, to make sure that we get the numbers correct, this grid shows who must and who needn’t present a resident tax declaration:

Residents required to complete an annual tax declaration

Pensioners Receiving one or more pensions from abroad that total more than 11,200€ a year*
Early retirees

With an income through:

           - interest of more than 1,600€ a year

           - renting of 1,000€ or more a year  

*some other conditions apply 

As you will see from this table, this means that most people resident in Spain will have to complete a resident tax declaration.

There are advantages to doing this. Presenting annual tax declarations makes obtaining a fiscal residency certificate much easier. The fiscal residency certificate is what is needed in the case of claiming residency for inheritance purposes. You also require one to ensure that there is no 3% retention if you sell your Spanish property as a Spanish tax resident.  

Hopefully, these figures won’t confound you further and with this information you can be clear whether you should or shouldn’t be presenting a resident tax declaration. If you are still in doubt then a fiscal representative, such as Ábaco, will answer any queries you might have. The deadline for presentation of your declaration is the 30th June.  

With the Spanish Tax Authority continuing to take its tax fraud campaign to the next level, this is one case where you mustn’t let the numbers get the better of you. 

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