Fiscal residents in Spain must submit an annual tax return. To determine if you are resident in Spain for tax purposes, you must fulfill one of the following conditions:
- Spend more than 183 days a year in Spain (January to December).
- If most of your essential activities and economic interests are situated in Spain: your main bank account, your permanent address, your pension is paid in Spain, etc..
- If your family (partner, children…) lives in Spain.
Once it is clear that you are fiscal resident in Spain, you need to inform your country of origin that you have changed your fiscal residency, so that your income or pension stops being taxed at source. There is one exception though: civil servants, who must continue paying taxes in the country where they worked.
Then you can ask the Spanish Tax office to deduct the tax directly. In Spain, you are liable to pay income taxes if your income or pension is over €22,000 (when you have one source of payment) or over €14,000 if you receive income from two sources (for example two different pensions.) If you receive more that €1,600 of bank interest or investment income it is compulsory to file a tax return, irrespective of you income.
To submit an annual tax return in Spain you will need to register in the selfassessment system of HACIENDA (Spanish Tax Office). The first time only your NIE number and a bank account will be required, and the following years you will also need to include a case of the previous year tax return.
How much tax will you pay? It will depend on the income tax band you are in. The Spanish system is progressive: 19 % up to 12,450€, 24% between €12,450 – €20,200 and then progressively. The minimum personal allowance is 5.550€ and it varies depending on your personal circumstances: age, children, etc. REMEMBER: the period to send the tax return starts on the 7 April and the deadline is the 30 June 2021.
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