Q: How are Spanish expatriate workers taxed?

The taxation of Spanish expatriates depends on: The country of residence: the tax laws vary among the countries. The International agreements: they avoid double taxation. The local legislation: each country has its own rules. In general, they tend to pay taxes in: The country of residence: on the income earned in that country, applying the local laws. Spain: in some cases, the income earned abroad may also be taxed in Spain, especially if certain thresholds are exceeded or there are no agreements to avoid double taxation.

Question 1

What is the difference between the Global Mobility service and the tax advice service for expatriates and inpatriates (i.e. Mobility Tax)?

Accepted Answer

The Global Mobility service refers to the process of managing and facilitating the relocation of a company&#8217;s employees from one country to another, making sure that the company complies with all the local regulations. The Mobility Tax service provides companies with customised solutions to manage the complex tax issues associated with the international mobility of their employees, thus optimising the tax benefits and mitigating the legal risks.

Question 2

How are Spanish expatriate workers taxed?

Accepted Answer

The taxation of Spanish expatriates depends on:

The country of residence: the tax laws vary among the countries.
The International agreements: they avoid double taxation.
The local legislation: each country has its own rules.

In general, they tend to pay taxes in:

The country of residence: on the income earned in that country, applying the local laws.
Spain: in some cases, the income earned abroad may also be taxed in Spain, especially if certain thresholds are exceeded or there are no agreements to avoid double taxation.

Question 3

How are inpatriate workers taxed in Spain?

Accepted Answer

Inpatriate workers in Spain can benefit from a special tax system which enables them to:

Be taxed as non-residents for the first 6 years.
Apply reduced tax rates to their income in Spain.
Enjoy certain exemptions.

To qualify for that tax system, they must meet certain requirements, such as not having resided in Spain for the previous 5 years and relocating for work reasons.

Question 4

How much personal income tax does an expatriate pay?

Accepted Answer

The amount of personal income tax paid by an expatriate depends on various factors such as:

The country of origin: the double taxation agreements between Spain and the expatriate’s country of origin may influence the taxation.
The length of residence in Spain: the tax system varies depending on how long the expatriate resides in Spain.
The type of income: the income earned in Spain and abroad is taxed differently.

In general, expatriates can benefit from:

The personal income tax exemption for certain income earned abroad and under certain conditions.
A special system for expatriates that applies a fixed tax rate to certain types of income.

Question 5

How many days does a person have to live outside Spain to avoid paying taxes?

Accepted Answer

In general, anyone who stays in Spain for more than 183 days a year is considered a tax resident in Spain. There are other major factors such as: Economic life: if it takes place mainly in Spain, the person could be considered a tax resident even if they do not spend 183 days in the country. Family: if their spouse and children reside in Spain, this may influence the tax residency status. The double taxation agreements: the agreements between Spain and other countries may modify the criteria for tax residency.

Question 6

How do you know if the Beckham Law applies to inpatriate employees in Spain?

Accepted Answer

To find out if employees are eligible for the Beckham Law, they must meet the following requirements: They must not have resided in Spain in the previous 5 years: in other words, they must have not spent more than 183 days a year in Spain during that period. The reason for relocation: they must have relocated to Spain for work reasons (employment contract, entrepreneurial activity, etc.). They must not have a permanent establishment: their economic activities in Spain must not generate a permanent establishment.

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