Taxation in Spain.

Three alternative criteria. Meeting just one is enough to be a tax resident:

• Presence in Spanish territory for more than 183 days during the calendar year (sporadic absences count as presence unless proven otherwise).
• Main centre or base of activities or economic interests in Spain.
• Presumption of residence if the legally non-separated spouse and dependent minor children reside in Spain.

In cases of dual residence with another country, the applicable DTT resolves the matter through "tie-breaker" rules (permanent home, centre of vital interests, habitual abode, nationality, mutual agreement procedure).

Summary of the main ones:

• General IRPF (progressive scale 2026): 19% up to €12,450, 24% up to €20,200, 30% up to €35,200, 37% up to €60,000, 45% up to €300,000, 47% above that.
• IRPF savings base: 19% up to €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000, 30% above that.
• Beckham Law: flat 24% up to €600,000 of employment income, 47% on the excess.
• Corporate Income Tax: 25% general rate, 15% for newly incorporated entities for the first two financial years with a positive taxable base.
• VAT: 21% general, 10% reduced, 4% super-reduced.

Autonomous regions may add further brackets to IRPF (regional portion) and adjust Wealth, Inheritance and Gift Tax.

Form 720 is an annual informative return that must be filed by Spanish tax residents with assets and rights abroad above certain thresholds: €50,000 for each of three blocks (accounts, securities and rights, real estate).

Following the CJEU judgment of 27 January 2022, the previous draconian penalty regime was declared contrary to EU law. Current penalties are the general ones under the General Tax Law, proportional and reasonable. The reporting obligation, however, remains in force.

Three steps:

1. Check the requirements: no tax residence in Spain in the previous 5 years, relocation for an eligible employment reason (employment contract, director role, remote work with visa, ENISA-backed entrepreneurship), no permanent establishment.
2. Registration with the Spanish Social Security system: as an employee or equivalent worker.
3. Application via Form 149: within 6 months of registration with the Social Security system. If the application is filed late, the regime does not apply for that financial year (it may apply for the following one if the conditions are met).

The NIE (Foreigner Identification Number) is the tax and administrative identifier for foreign nationals in Spain. It is essential for almost any transaction: buying property, opening a bank account, becoming a shareholder or director of a company, receiving an inheritance.

It is applied for at the Immigration Office of the place of residence or, for non-residents, at the Police Station. It can also be applied for from abroad at a Spanish consulate. Processing can take between 1 and 6 weeks depending on the office and time of year.

Non-residents with real estate in Spain are taxed under IRNR:

• If the property is not rented out: imputed real estate income at 1.1% or 2% of the cadastral value (depending on whether it has been updated). 19% rate for EU/EEA residents, 24% for third countries.
• If the property is rented out: taxation on actual rental income. EU/EEA residents may deduct expenses; others are taxed on gross income.
• On sale: capital gain at the non-resident rate. 3% withholding on the sale price as a payment on account.

For rentals, quarterly or annual filing of Form 210.

Dual residence is resolved by applying the "tie-breaker" rules of the bilateral treaty. In order:

1. Permanent home available in only one of the States.
2. If there is a home in both: centre of vital interests (closer personal and economic ties).
3. If this cannot be determined: habitual abode (where more time is spent).
4. If still not resolved: nationality.
5. If still unresolved: mutual agreement procedure between authorities.

The criterion determines which State has taxing rights over worldwide income. The other State may tax only certain types of income under the DTT.