ANSWERED - Spanish taxes for digital nomads
The Digital Nomad Visa came into existence in 2022. We have been providing our Clients with useful information and guidance as to what this could mean for their move to Spain.
We have also hosted a webinar around Spanish Taxes for Digital Nomads when we answered numerous questions. We hope you will find the following useful:-
1) my employer has allowed me to work in Spain and I have my digital nomad visa, what rate of tax do I pay? How is income tax calculated?
The digital nomad visa allows the employee to access a Special Regime of Personal Income Tax in Spain, commonly known as “ Beckham Law”, regulated in article 93 of Personal Income Tax legislation. Any individual accepted under the referred Beckham law, will be taxed at a flat rate of 24% until Euros 600,000, with neither personal allowances nor deductions.
In Spain, the General Regime of Personal Income Tax is a progressive tax rate up to 47%, and includes personal allowances and certain tax deductions.
In our experience, for high profile employees, it is usually very convenient to apply for the Special Regime. The Special Regime has certain requirements that need to be met and therefore, it is highly important to seek for tax advice beforehand.
2) Do I have to submit annual or quarterly returns?
Personal Income Tax is submitted annually, from April to 30th June, relating the previous calendar year.
3) When I arrive in Spain and as I will be working, shall I register with the Spanish tax authorities straight away?
The registration before the Spanish Tax Authorities should be completed as soon as the individual knows he/she will be considered as tax resident in our country. An individual is considered as tax resident in Spain when meeting any of the following requirements :
- Individual stays in our country 183 days per calendar year
- Main source of income is Spain
- Spouse and descendants reside in Spain permanently. This requirement admits proof to the contrary.
4) Do I stop paying tax in my home country? Do I still have to submit a tax return in my home country?
If anyone relocates to Spain and meets any of the previously mentioned requirements on the year of relocating, he/she will be considered as tax resident in our country and will have to pay taxes only in Spain in that financial year. Under certain circumstances, the individual might need to pay taxes on his/her home country and then, apply double taxation deduction on the Spanish Personal Income Tax. The obligation to pay taxes in the home country will depend on various aspects : double treaty agreement, internal tax legislation,..etc. Thus , general advice on this point is hard to be given.
Should none of the tax residency requirements is met, the individual would be considered as tax resident of his/her home country and would need to pay taxes in his home country. As explained in the previous case, the individual might also be required to pay taxes in Spain as a non resident and therefore, each specific case should be looked at in detail.
5) will my employer pay tax on my salary in my home country?
This is a very open question and depends on each country tax legislation and also each Double Treaty Agreement.
6) will I pay social security here in Spain?
No, you have to obtain a certificate from your home country that the contributions are covered for the first 2 years.
7) will digital nomads be taxed as a non-resident and will this be the case for as long as they hold the Digital Nomad visa?
Yes and no. Digital nomads can apply for the Beckham Regime, and if accepted, they will be taxed as a nonresident in our country. However, this does not mean that they will be under the Beckham regime as long as they hold the digital Nomad Visa, since the tax regime includes certain cases in which the tax payer can be excluded from the Regime.
– would this be a fixed rate of 24% for all income up to 600,000 euros?
Correct, and above 600,000 47%
– would we be exempt on paying tax in Spain on other worldwide assets?
Correct. Only taxed in Spain for Spanish assets and income generated in Spain, except income from employment, which is taxed worldwide (salaries).
– will we be exempt from the requirement of filling in the Modelo 720 form?
Correct. No obligation to file Model 720.
If you need help applying for your Digital Nomad Visa, or tax, do contact us.
My Lawyer in Spain through firstname.lastname@example.org
Tax advice provided by MDG Advisors – mdgadvisors.es
I would like to have information about the digital nomad visa.