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PAYING TAXES IN SPAIN? Here's What You Need to Know Before 30th June | Pellicer & Heredia
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Oct 29, 2024
Discussions turned to filing taxes in Spain when Kal welcomed Ignacio back from @Pellicerheredia in their new regular slot in the afternoons: Every other Wednesday from 16:00 CET The deadline for your Declaración de Renta for 2023 is the end of June this year. You can see more about Spanish tax residency at www.alicantelawyers.es, where you can also watch back some of the previous webinars. Be sure to Like 👍 this and Subscribe to our channel if you found it useful. Website: http://www.bayradio.fm/ Mobile App: https://app.appinstitute.com/yddcc Facebook: https://www.facebook.com/BayRadioInSpain Twitter: https://twitter.com/bayradioinspain Instagram: https://www.instagram.com/bayradiospain/
View Video Transcript
0:00
so we're going to talk taxes today which
0:02
nobody really likes the subject but um
0:04
what was it that that statement two
0:06
things are certain in life taxes and
0:08
death it that's correct yeah so uh what
0:11
about the lenta which is uh is being
0:14
dealt with at the moment then right okay
0:16
this is important message for people
0:18
that are spending more than 183 days in
0:21
Spain right so if those was living now
0:24
in Spain and they spent on in 2023 right
0:28
so we always look behind yeah in a rare
0:31
a year back yeah um they spend more than
0:34
6 months um that means that they are
0:37
supposed to laod their income tax return
0:39
return now people get confused here call
0:42
about uh having the residency permit and
0:45
tax certificates right I mean you might
0:49
get a TI card and not necessarily be tax
0:53
resident right but the bottom line to
0:55
keep it very simple if you spend more
0:57
than six months in Spain um you will be
1:01
label to declare here there is a dual
1:04
taxation treaty well there are many dual
1:06
taxation treaties with countries I mean
1:08
so for Britain for instance has a dual
1:10
taxation what about and and if you're if
1:12
you're in the EU of course you're fine
1:14
yes any any country there are many there
1:16
are different uh dual taxation treaties
1:19
between Spain and we've got with France
1:22
even within the EU you yes because the
1:25
tax is not something unified by the by
1:28
Europe you see so every country is
1:30
different and we have certain allowance
1:33
certain agreements the bottom line
1:35
they're very similar I will say the
1:37
structure of the treaties are very
1:40
similar or you know they look like
1:43
pretty good all all of them similar but
1:46
they're not the same we've got one with
1:48
the United States one with um with the
1:50
UK um all around the world you know all
1:53
around the world and so depending on
1:56
nationality of the person who's lodging
1:58
their income tax they need to tell their
2:01
accountant well the nationality and
2:03
always bear in mind the Dual taxation
2:05
treaty between Spain and whatever
2:07
country he or she belongs to okay I I
2:11
see so take us through it if you now
2:14
think okay I'm I'm eligible what do you
2:16
have to do right now let's say we did
2:19
comply with the first rule unless there
2:21
is different uh conflicts which the Dual
2:24
taxation treaty really just in case
2:27
people spend pretty much the same amount
2:29
of money
2:30
what is the center of interest cuz some
2:33
people might have two properties one
2:35
here one there be six 6 months and 6
2:37
months or pretty much like you know you
2:40
know and and and there are rules that
2:42
that um that identify where you should
2:45
LOD your income tax return now for you
2:49
to know clearly if you spend more than
2:51
183 days then now is a time from the 1
2:54
of January let's say this year is 2023
2:57
we're talking about3 looking at
3:00
uh 1st of January to the 31st of
3:03
December therefore you will need to
3:05
disclose it's a self assessment okay and
3:09
you'll need to disclose how much income
3:11
you have I mean do I have a state
3:13
pension do I have a civil service
3:15
pension do I have a private pension do I
3:19
have an IRA if you're an American do I
3:23
have a Roth IRA do I have a Social
3:25
Security pensions so wow yeah so all
3:28
these information need to be disclosed
3:31
right as I said depending on the country
3:33
where you're coming from we've got
3:35
different rules to taken into
3:37
consideration now do I have property
3:40
income even though he's abroad okay I
3:42
need you to disclose all the income and
3:45
all the expenses on that investment that
3:47
you made the purchase value which is a
3:51
rule okay like catastral value purchas
3:54
value and we need to get a net figure of
3:57
every single property well the good
3:59
thing here is only this good um that if
4:02
you're renting long-term
4:04
property from the 40% of the net is
4:08
taxable the 60% is taxfree that's very
4:12
good for people to make decisions
4:13
because a lot of them come over here and
4:15
they just ask for do me a simulation do
4:18
what is best before you even commit
4:20
yourself to make the decision about is
4:22
it better for them to rent correct
4:24
correct that's a lot of common questions
4:27
um so that if you're renting through the
4:29
platforms the online platforms like you
4:31
have through Airbnb or booking or
4:33
whatever of this um that is not exempt I
4:37
mean that that you don't have an
4:38
allowance so the figure you need to work
4:40
on is income minus expenses and the net
4:44
is taxable 100% so there is not any
4:48
reduction then if you have um what else
4:51
could you have there we talk about work
4:53
we talk about income from uh property um
4:57
dividends and interest from Banks
5:00
even though you got interest abroad uh
5:03
you need to declare it here now dual
5:06
taxation treaty applies as well there is
5:08
rules There are rules that they could
5:10
tax you like property certain allowances
5:13
for certain different types of income
5:15
the good thing is that tax that you paid
5:17
abroad is deductible here so that's good
5:19
as well so you don't pay double if it's
5:21
been paid
5:22
already and um what else we could
5:25
consider as an income well I know people
5:28
for example today I have a few that they
5:30
have olive trees here and they go to the
5:32
cooperative and then just sell the
5:34
olives okay or they they self-employed
5:37
and they work as self-employed and then
5:40
all the invoice economic activity
5:42
economic activity exactly um all these
5:45
needs to be disclosed then you we need
5:47
your your birthday so the date you were
5:49
born to work out the allowance whether
5:52
you married or not to get to be able to
5:55
do it joint rent joint income tax to get
5:59
her allowance towards you or him to you
6:02
children as well and different bits and
6:05
pieces you know when you do some
6:07
donations as well little little I guess
6:10
if you have a big change as well like
6:11
you sell a property or something like
6:13
that perhaps that's also part of it yes
6:15
you've got assets yeah that's a good one
6:17
and and that's something important I
6:19
always ask clients if they've sold the
6:21
property and stocks and shares perhaps
6:22
stocks and shares exactly it's because
6:24
if you sell the shares I need to
6:27
disclose purchase value selling value
6:30
if you sold the property if you're over
6:33
65 on your main property as long as you
6:36
stay there more than 3 years is taxfree
6:38
wow okay that's very good now if you're
6:41
below or is your second property you're
6:44
going to pay taxes from the net the tax
6:47
rate is different we've got it in our
6:48
website this Landing scale if they go
6:50
what we do uh taxes um la Renta or
6:54
income tax return they will see the
6:56
sliding scale that goes from I believe
6:59
50 % up to 48% okay every every marginal
7:04
has got a percentage so from these
7:05
amount to that I tell do they change
7:08
year to year sorry Nao the actual
7:10
percentage that you might have to pay um
7:12
it's not very often to change but it's
7:14
being updated call is being uh for the
7:18
investment um they did unfortunately
7:20
change it because we used to have 19 21
7:23
and 23 right yes but but these people
7:26
said it was not enough and they said 26
7:28
28
7:30
so now you've got again sliding scale so
7:33
what you might have done before could be
7:34
a little bit different this
7:36
year 2020 every year something varies so
7:39
something is different right I normally
7:41
say to clients if if you plan ahead
7:45
there is a way to control your taxes and
7:47
that's that's good that's a good thing
7:49
of it if you know the thresholds if you
7:51
know the allowances for example if you
7:54
only have in pensions and you don't
7:55
reach 15,000 you're okay you're okay
7:59
right right uh but again not paying tax
8:03
doesn't mean you're not obliged to Lodge
8:04
your income tax return you still have to
8:06
you still have to LOD it even though
8:08
zero sometimes okay for example if you
8:10
manag to get dividends few dividends few
8:13
interest that really makes you eligible
8:17
or oblige you to Lodge your income tax
8:20
return the period to Lodge it goes from
8:22
April to the end of June okay so we're
8:26
still on time yeah and and then we will
8:29
need their Bank Account Details so it
8:31
could be direct debit the payment in
8:34
case of payment or a rebate a lot of
8:36
people don't know they being taxed here
8:38
and if especially if you're working
8:40
you've being taxed probably some money
8:43
and sometimes when you work it out at
8:45
the at the end of the year you get a you
8:47
get a refund of a lot of money why
8:50
because it depends on personal
8:51
circumstances MH people get surprised
8:54
about that but this happens you know
8:56
does it take a a long time for the
8:58
rebate to come through perhaps not
8:59
necessarily in the old days yes he used
9:01
to take more time but now I think
9:04
they're very straightforward unless you
9:07
have a awkward situation or difficult
9:09
things or paperwork they need to see for
9:12
example you sold the property you're
9:14
making a loss you know they won't like
9:17
making a loss you're claiming money back
9:19
from all the taxes they're going to ask
9:21
you to prove where is that paperwork
9:24
that's why I always recommend clients to
9:27
Pro to keep them up to four years
9:29
all their paperwork I see four four year
9:32
back they could look at or they could
9:35
request it to you now important advisor
9:37
well call they need to make sure their
9:40
address on their income tax return is
9:42
accurate and they get the post otherwise
9:45
my recommendation is to appoint the
9:48
lawyer as an address because I see so
9:51
many stories which I you know I see
9:54
because they come from different places
9:56
they never notify well a lot of the time
9:58
mail doesn't get deliv especially if
10:00
you're living in a large apartment
10:01
complex sometimes you know I mean
10:03
certainly in mine you know I just found
10:05
my car tax because it happened to be
10:06
somebody who put it on the side they
10:08
don't actually end up going through the
10:09
door at all so you right um and and that
10:12
could be quite scary sometimes cuz
10:15
sometimes and it didn't even even happen
10:16
to me which they know my address but
10:19
these people you know and and and I get
10:22
very upset with them because they frizze
10:25
your account so they try to deliver a
10:27
letter that you probably don't know you
10:29
don't get or you don't get then after
10:32
twice they just uh enforce the the
10:36
resolution MH and they send you another
10:39
letter but the money is taken it
10:41
automatically we we're handling a lot of
10:43
cases uh unfortunately that they have to
10:45
do it retro um look at what's happened
10:48
and why that also costs it cost yeah
10:52
yeah U important advice call the address
10:55
is very important is self assessment so
10:58
people need to disclose
11:00
their own
11:02
information they could download the tax
11:05
details from the tax office with their
11:07
digital certificate or we could do it
11:09
for them MH and they will have they will
11:12
have their information doesn't mean that
11:15
is a truth because sometimes tax office
11:17
will know where you work but probably
11:18
you're doing some business with somebody
11:20
else in the UK or abroad and nobody they
11:23
won't have all they won't have that and
11:25
you that's Z for you to do it and
11:27
disclose that information if somebody
11:30
has realized they actually probably
11:31
should be declaring this what's the best
11:34
way to go about it well uh I don't I
11:38
don't expect clients knowing how to do
11:40
it themsel okay I mean they they've got
11:42
one option they could they could even go
11:44
to the tax office apply for an
11:45
appointment and try to discuss it with a
11:48
clerk can you do it online possibly or
11:51
um I don't I don't well you could do it
11:54
with your digital certificate and try to
11:55
do the borador right the draft MH I do
11:59
not recommend that unless is very very
12:02
straightforward and you are very very
12:04
clear cuz you know dealing with the tax
12:06
office is always a kind of worms of
12:08
course anywhere and um and then you
12:11
doing your draft if it's very
12:12
straightforward okay I will accept it
12:14
you know but even if you have
12:16
international elements even the clerk
12:18
will not know because they they and and
12:20
you still have uh telephone assistance
12:23
if you need but they are not that
12:26
specialist you know they are more like
12:28
trying to put details in place perhaps
12:30
more used to dealing with your average
12:33
Spaniard with their current situation
12:35
with one perhaps one job and so on so
12:37
probably so we we need to be talking to
12:39
a hore or or International lawyers like
12:42
yourselves yeah yeah um when when you
12:44
speak to a histor just make sure they
12:47
understand the the international
12:49
situation because sometimes some histor
12:50
may do basic stuff and some of them
12:53
might have a more a better knowledge um
12:57
but not necessarily it's a wide ranging
12:59
isn't it because the direct translation
13:01
would be accountant I suppose for
13:03
British um but um they they're
13:06
multifaceted in AR yes the hisor is is
13:10
is somebody technically the word will be
13:13
uh dealing you know hon is De deer
13:17
dealer yeah which yeah which to be
13:19
honest the original historic just past
13:22
paperwork yeah doesn't need to advise
13:24
doesn't need to think is just passing on
13:27
paperwork and I do on your be have
13:29
whatever an need to do but doesn't take
13:32
that much responsibility you know the
13:35
hisory now lawyers or accountants are
13:37
more advisers you know H and that's why
13:40
it's better advis specifically on these
13:43
kind of income tax returns I would say
13:45
especially an international sense as
13:46
well if if you know if you're from a
13:47
different country living in and or
13:49
working in Spain yeah yeah and uh but as
13:53
I said some histor might be okay but uh
13:57
I I sometimes get the feeling from
14:00
clients they went to hisor and and loss
14:02
in communication you're being very
14:04
generous because my experience and other
14:07
peoples isn't actually that great say
14:09
I'm being generous yeah yeah sometimes I
14:12
prefer to be generous yeah
14:14
yeah but uh but yes and unfortunately uh
14:19
Carl when that's why I'm trying to
14:21
insist when we talking about taxes is
14:24
important
14:25
because sometime sometimes they could
14:27
say oh don't worry about this well you
14:29
do worry I mean not necessarily trust
14:32
you don't worry about this you know
14:34
easily uh I could tell you a lot of a
14:36
stories even when they they just told
14:39
them not to worry about an A labor issue
14:43
and he became a big labor issue you know
14:46
even freezing your account even a lot of
14:50
things you know uh I prefer dealing from
14:53
the very beginning rather than you when
14:55
you have a problem after the his well
14:58
again because that's just going to
14:59
endure more costs for the client corre
15:01
if if they they have to do that so yes
15:05
uh so my my specific advise will be go
15:08
to people who knows you know and now how
15:10
do you know well then just as as you
15:12
know you could go to websites learn a
15:14
little bit more and do your shopping you
15:17
know I was about to point out really um
15:19
because there's it's quite
15:20
straightforward and laid out quite well
15:21
on the pelan Heria website which you can
15:24
find by just Googling alakan lawyers of
15:26
course uh and in not just in English
15:29
been in uh Spanish in Dutch in French
15:32
and also uh in Russian and the basics
15:34
for all of these sorts of things are all
15:36
there aren't they different languages so
15:38
it's a lot more straightforward when you
15:39
can see it laid out in front of you
15:41
that's why I recommend clients just
15:43
going to our website our website is I I
15:46
consider to be pretty good because it's
15:48
like your garden you're watering every
15:49
day you're updating your your content
15:51
you know so and this is for clients and
15:53
for people to take it away and and learn
15:55
and if they need help they could come
15:57
you know uh I try to update lenta
16:00
article is being updated okay so he
16:02
pretty much updated and and and no
16:05
issues with that uh you'll find that on
16:07
the tax and fiscal Services part of the
16:10
alakan lawyers website uh just one more
16:13
thing on that address um there's nothing
16:16
wrong with using your hore or your
16:18
lawyer as an address it just means that
16:20
actually the information will get to you
16:22
as we mentioned in the past post doesn't
16:24
always reach you in Spain yeah uh you
16:26
mean by post youing or is using using
16:30
your hore or your lawyer as you
16:32
mentioned as as the actual address for
16:34
your tax returns correct um I I I try to
16:38
be very picky on the postal address and
16:41
Bo on or PO box or whatever right uh if
16:44
you're not going to be in the country I
16:45
always recommend to use your lawyers
16:47
it's better than your home address
16:49
obviously MH but uh then I recommend you
16:52
to have a digital certificate that makes
16:54
our lives much easier here dealing with
16:56
the administration it's a little bit so
16:59
allows people to act on your behalf
17:01
online yes it's like a p of attorney
17:03
it's like a digital digital certificate
17:06
is a p of attorney uh to deal with the
17:09
administration and you could download
17:11
all the records and you need to Grant it
17:14
to people that you trust and and and and
17:17
and people of your Law Firm that you
17:19
trust you know we we have them in our
17:21
database and that really helps because
17:24
it saves time otherwise if you don't
17:26
want to do it that's fine but you need
17:28
to down load everything and do
17:30
everything that's the only difference
17:31
you know the time to launch call is
17:34
April May and June and for payments are
17:37
30th of June which is 1 of July first
17:41
60% payment is is direct debit on the
17:44
1st of July and on the 5th of November
17:48
is the other 40% right okay I mean it's
17:51
good to do tax planning before
17:53
especially if you're selling your
17:54
property if you're doing a lot of things
17:56
that you're going to end up paying taxes
17:58
mhm it is important uh I try to when
18:02
they ring us I send them a list of
18:04
things that I need from them for them to
18:06
have it all well prepared the more time
18:08
they save us the more time they save
18:10
themsel as well uh and less expensive
18:13
will be the nobody wants a big tax yeah
18:16
yeah
18:17
correct so um that with regards to um
18:22
income tax returned okay a little bit on
18:25
wealth tax now then how wealthy do you
18:28
have to be to pay tax in Spain right it
18:30
will depends first on whether on what
18:34
community you are a tax resident okay
18:37
the the wealth tax needs to be loded
18:39
from April exactly the same like that
18:42
Renta uh first of uh April to the 30th
18:46
of June always one year back okay you're
18:49
looking up back now you will need to
18:51
have the main property doesn't count up
18:55
to €300,000 per person so you've got an
18:57
allowance per person right up to
19:00
300,000 okay then you have in this
19:03
community nowadays €500,000 per person
19:08
okay and after that then it's taxable it
19:12
goes this sliding scal thing I've got it
19:14
in the website um it goes from zero up
19:18
to uh
19:20
2.5% of your wealth uh this got an
19:24
allowance so always we talked about the
19:27
net figure okay if you have mortgages
19:30
that doesn't that counts in your favor
19:32
okay so the equity is what you have net
19:36
so that's per person and um this
19:39
community uh well actually the pp advis
19:42
in Valencia in Valencia said they would
19:46
remove the wealth tax and make it exempt
19:49
like andalia balar or Madrid still
19:52
didn't happen hasn't happened as yet
19:54
hasn't happened as yet because between
19:56
all these fight call between the central
19:58
government and the local
20:01
reg they they um approve the solidarity
20:05
tax and that only applies for those
20:08
who've got more than 3, 700,000 e and
20:13
the tax will
20:15
apply if there was not a wealth tax in a
20:18
community for example Madrid doesn't
20:20
have a wealth tax so they will not pay
20:23
all this let's call it like an allowance
20:26
or an exemption because the community
20:29
doesn't want that but the central
20:31
government says you'll have to add that
20:35
and combine it with your income tax
20:38
return okay now there is an allowance so
20:41
there is a reduction of that wealth tax
20:44
it could go the tax could be reduced up
20:46
to 80% of that combined by the income
20:51
tax return I see okay so there is always
20:54
um a rule that can not go over more than
20:57
60% of what you paid is a quite complex
21:01
formula but you need to do in
21:03
combination so if you're doing your
21:05
income tax return with one uh person I
21:08
will recommend you to do the wealth tax
21:10
as long as they know how to do it with
21:13
the same advisor okay because you need
21:15
the two figures to use the allowances
21:18
yeah okay and that so we need to talk
21:22
about wealth tax only if applicable in a
21:25
community and wealth uh solidarity tax
21:29
will only apply for those who do not
21:33
have the wealth tax approv so in this
21:36
region in to be practical we have wealth
21:39
tax I see okay so that applies okay and
21:43
it's obviously now we're going to talk
21:44
resid and non-residents because it'll be
21:46
different right yeah yeah yeah that's
21:48
correct the non-resident is uh about
21:52
minimum €700,000 plus the property mhm
21:56
but that's easy to control C because you
21:58
know what you're going to bring to the
22:00
country as a non tax resident so you
22:02
could always do tax planning and say
22:03
well what is a wealth tax here these
22:05
amounts okay I because it's only tax
22:08
whatever is in Spain for non-resident
22:11
for residents is worldwide assets of
22:15
course yeah so that gives you um um a
22:20
hint whether I mean I always say to CLI
22:22
call just do before you relocate into
22:25
Spain just hire somebody to do planning
22:28
MH and then you've got the answer and
22:29
he's not Bob in the bar telling you
22:32
about about all these things absolutely
22:34
yeah there's always someone in the bar
22:35
who knows but they're not necessarily
22:38
correct that's true but but we are doing
22:41
a lot of advice a lot of video
22:43
conference for a lot of Americans that
22:45
they are coming over to Spain and their
22:48
system is different okay is is is
22:50
completely different we do a lot of
22:51
Americans uh income tax return and um
22:55
and and they're very grateful to to know
22:57
and they contact us to know exactly
23:00
about their and this can be done
23:01
obviously since Co everything's can be
23:04
done online there's no problem at all so
23:06
with video conferencing as well and I
23:08
think we're going to be talking in a bit
23:09
more detail about that with um Rich
23:11
Reynolds our us correspondents in in the
23:14
coming future aren't we it's it like I
23:17
said tax for anybody even in your own
23:19
language is a bit of a Minefield and I
23:21
think you know whatever help you can get
23:23
uh is uh is is welcome certainly in
23:26
Spain where things can be like you said
23:28
not just different uh on a national
23:30
scale it's different depending on which
23:31
Community or region you live in uh and
23:34
then if you're uh resident if you're
23:35
non-resident and there are lots of
23:37
different permutations as always as
23:39
there are with taxes yeah yeah yeah and
23:42
uh that's what I always say just um get
23:44
advice and um and um do your best you
23:49
know anything we've been talking about
23:50
today you can find online at alakan
23:54
lawyers. es and uh you don't have to
23:57
look for pelan hered Al lawyers. we'll
24:00
bring you straight to the website Plenty
24:02
about taxes and more on there good to
24:05
talk to you okay thank you see you soon
24:07
cheers cheers bye
#Financial Planning & Management
#Tax Preparation & Planning