In Spain, it is common to hear a phrase—which comes from a government advertising campaign—when talking about taxes: “Hacienda somos todos”, which means “Treasury, we are all”. This is because each person has the responsibility to contribute to the State with their taxes. Of course, digital nomads must pay taxes in Spain if they meet the conditions. They enjoy multiple advantages in terms of flexibility, but they also have fiscal responsibilities.
As it is a complex and difficult-to-understand issue, especially if you come from a country with a very different system from Spain, don’t worry: Nomada explains all you need to know about taxes for digital nomads in Spain.
Taxes for Digital Nomads in Spain: Tax Residence
To know if you should pay taxes in Spain, the first thing is to determine if your tax residence is in the country. Tax residence influences the taxes you must pay and can even force you to pay taxes in another country depending on your personal and professional circumstances.
Factors to Determine Tax Residence in Spain
The factors to determine the tax residence in Spain are three, explained in a very simple way:
1. Residence in Spain for at least 183 days a year
If you spend more than 183 days in Spanish territory during a calendar year, the tax authorities will consider you a tax resident in Spain. These days do not need to be consecutive and are counted even without a fixed address in the country. It’s important to keep an accurate record of the days you spend in Spain to avoid misunderstandings with the tax authorities.
2. Develop the basis of your economic activities in Spain
If you generate most of your income in Spain or base your businesses and professional activities there, you will be considered a tax resident. This includes having main customers or your company’s headquarters in Spain. The tax authorities will examine where you conduct your economic activities to determine your tax residence.
3. Have children or spouse – not separated – with habitual Spanish residence
Although this criterion usually mainly affects the person living in Spain, it can be taken into account. If your immediate family (spouse and minor children) habitually resides in Spain, the authorities may consider that your tax residence is in Spain, even if you spend less than 183 days in the country. This criterion is used to avoid situations in which tax evading attempts are made through the physical separation of the family.
Consequences of Having Your Tax Residence in Spain
If the tax authorities consider you a tax resident in Spain, you must pay tax on your global income, including income from both Spain and abroad. This covers salaries, rental income, dividends, interest, and other types of income. Spain has double taxation agreements with many countries, allowing taxes paid in one country to be credited in the other and preventing double taxation.
On the other hand, if you are not a tax resident in Spain but generate income in the country, you will be subject to the Non-Resident Income Tax (IRNR), which implies that you will only pay taxes on income obtained in Spain. This regime can be more beneficial depending on your specific situation and the income you generate inside and outside the country.
What laws regulate taxes for digital nomads in Spain?
The Startup Law in Spain has introduced significant changes in taxation, including expanding the cases in which foreigners can benefit from the Beckham Law. This special tax regime allows them to be considered “tax non-residents” even if they live in the country for more than 183 days. Yes, this law is named after the famous British soccer player.
Requirements to benefit from the Beckham Act
- Not having been a legal resident in Spain during the last 5 years.
- Transfer to Spain for work reasons.
- Have 6 months from obtaining the positive resolution of the digital nomad visa to submit the application to the Tax Agency.
Benefits of digital nomads in special tax regime
So, are taxes for digital nomads in Spain advantageous? Depending on the circumstances, you may enjoy these benefits:
- Reduced income tax rate. Lower income tax rates.
- Exemption from other taxes. Optimization of the tax situation.
- Geographical flexibility. Greater freedom to work from anywhere in the world.
- Administrative simplicity. Lower administrative burden in terms of tax compliance.
Types of taxes that you must pay as a digital nomad in Spain
We can talk about four large tax blocks, which are similar to those that anyone else who does not work as a digital nomad can pay.
Personal income tax (IRPF)
This tax applies to the income of individuals in Spain. Digital nomads generating income in Spanish territory may be subject to it. Freelancers may need to pay quarterly taxes, while employees will have monthly payroll withholdings, which are adjusted in the annual tax return.
Value-added tax (VAT)
Indirect tax on the consumption of goods and services. Digital nomads who sell products or services to Spanish consumers may have to collect and remit VAT to the tax authorities.
Real Estate Tax (IBI)
It taxes the ownership of real estate located in Spanish territory. If you buy a house or a place to work, you will have to pay this tax.
Other local taxes
Depending on the location, they may be subject to municipal or regional taxes. For example, you could pay tourist taxes for your accommodation.
It is important that digital nomads understand their tax obligations in Spain and comply with the requirements established by the authorities. Consulting with a tax or accounting professional can be essential to ensure compliance and avoid tax problems in the future.
How to calculate the taxes you must pay in Spain?
Although we recommend that you hire a consulting service – whether in person or online – to manage your tax matters in Spain, it is important that you have a basic knowledge and have some control. To do this, you can follow these steps:
Step 1 – Registration and monitoring of income
Keep a detailed record of all income earned while working in Spain.
Step 2 – Determination of tax residence. Understand the criteria that determine tax residence
Understand the criteria that determine tax residence.
Step 3 – Calculation of personal income tax
Know the applicable tax rates and apply them to the income obtained in the country.
Step 4 – Use of accounting and tax management software
Programs such as Alegra, Odoo, Quaderno or Declarando can simplify the process of calculating and paying taxes.
Tax models to keep up with taxes
Taxes for digital nomads in Spain must obey strict rules. If you work as an independent digital nomad in Spain, it is crucial to be up to date with your tax obligations to avoid sanctions and legal problems. Below, I explain the main tax models that you must present. You can do it directly yourself or with the help of a specialized service.
Modelo 100
The Annual Personal Income Tax Return, commonly known as the “income tax return,” is likely the best-known model. You must submit this model annually to declare all your income and deductions for the fiscal year. It’s essential to adjust the withholdings applied to you and determine whether you need to pay additional taxes or are entitled to a refund.
Modelo 303
The Quarterly VAT Return is mandatory for self-employed and companies that are subject to Value Added Tax (VAT). This model is presented every quarter, and in it you must declare both the VAT reflected in your invoices issued and the VAT incurred on your expenses and purchases. The result can be to enter (if you have passed on more VAT than you have incurred) or to return (if you have incurred more VAT than you have passed on).
Modelo 130
It is a Quarterly Personal Income Tax Return for the self-employed. Through this model, self-employed workers pay the personal income tax corresponding to their quarterly income. This payment is subsequently deducted from the annual personal income tax return (Form 100). It is especially important for the self-employed who do not have withholdings on their bills, since it allows them to advance the payment of taxes and avoid large disbursements at the end of the year.
Modelo 210
It is the Non-Resident Income Tax Return (IRNR). This model is relevant for digital nomads who do not reside fiscally in Spain but who generate income in the country. You must declare this income and pay the corresponding tax, which may vary according to the type of income and the country of residence.
Modelo 720
The Informative Statement about Assets Abroad is required if you are a tax resident in Spain and own assets or rights located abroad (such as bank accounts, securities, insurance, real estate, etc.) worth more than 50,000 euros. You must report this through the designated model. While this model doesn’t involve paying taxes directly, failing to declare or submitting incorrect information can result in severe penalties.
Penalties for not paying taxes in Spain
Taxes for digital nomads in Spain are taken very seriously. As in any other country, non-compliance with tax obligations can lead to various sanctions:
- Fines for extemporaneous presentation. They vary according to the type of tax and the delay time.
- Late payment surcharges. They are applied to the unpaid amount and increase over time.
- Late payment interest. It is applied to the unpaid amount and calculated from the due date until the actual payment.
- Penalties for tax fraud. They can include significant fines and even criminal action.
Online tools to manage tax payment in Spain
Several online tools are available to help manage the payment of taxes for digital nomads in Spain. Here, I present three of the most outstanding: Quaderno, Declarando, and TaxDown.
1. Quaderno
Quaderno is a tool designed to facilitate invoicing and tax management, especially useful for freelancers and small businesses that operate online. With Quaderno, you can automate the issuance of invoices and the calculation of taxes in real time, whether you sell physical products or digital services.
This platform is responsible for generating accurate tax reports and keeping your data updated in accordance with current legislation. In addition, Quaderno integrates with several payment and e-commerce platforms, such as PayPal, Stripe and Shopify, which facilitates the management of your transactions and the fulfillment of your tax obligations in different countries, including Spain.
2. Declarando
Declarando is a specific tool for freelancers in Spain, designed to simplify tax returns. This platform guides you through the entire tax management process, from invoicing to the presentation of tax models.
Declarando offers personalized tax advice and helps you optimize your tax deductions, ensuring that you do not pay more taxes than necessary. You can also sync your bank accounts to keep accurate control of your income and expenses. With Declarando, the filing of quarterly and annual taxes becomes a more efficient and less stressful process.
3. TaxDown
TaxDown is another popular choice for digital nomads in Spain, known for its ease of use and accuracy. It uses an advanced algorithm to review your tax data and find possible deductions and benefits you might have missed.
The platform lets you import your tax data directly from the Tax Agency, making tax return preparation simpler. TaxDown is designed for individual users, including freelancers, and offers a review service by tax experts to ensure your return is complete and accurate before filing.
This is significantly lower than the progressive rates Spanish tax residents must pay, which can reach up to 50%, depending on the region.
Example of taxes for a digital nomad in Spain
Ana García, a freelance graphic designer with a tax residence in Andalusia, generates an income of 35,000 euros per year. Under the Beckham Law, she pays a 24% personal income tax, that is, 8400 euros. Without this law, she would have paid up to 44.4%, about 15,228 euros.
Depending on your circumstances, you may set up your business as a self-employed person in Spain. This requires paying a monthly fee for Social Security contributions. These payments count toward a future pension or unemployment benefits, depending on the amount.
We recommend contacting a counseling service, either in person or online, to find the best solution for your situation.
Frequently asked questions: taxes for digital nomads in Spain
Does a digital nomad pay taxes in his country of origin and in Spain?
It depends on your tax residence, the duration of your stay, and the income you receive. In some cases, you may face double taxation, but this can be avoided through double taxation agreements many countries have.
Is an accountant or tax advisor mandatory to pay taxes in Spain?
We recommend understanding your tax obligations to avoid issues with tax authorities. You can also use online tools like Quaderno or Declarando, which provide advice for companies and freelancers in Spain and other countries.
What are the consequences of not complying with tax obligations in Spain?
Like any other country, Spain pursues tax fraud and can impose sanctions and fines, as well as claim late payment interest. In the most serious cases, failure to comply with tax obligations may result in legal action.
What can I do to optimize my tax burden as a digital nomad in Spain?
We recommend taking advantage of available tax deductions, using the most efficient tax structures, and properly planning your income and expenses. You might consider setting up a company in Spain, for example. It’s important to consult an expert tax advisory service for guidance.
Are there tax incentives for digital nomads in Spain?
Yes, there are tax incentives for digital nomads in Spain. For example, the Beckham Act and other special tax regimes encourage the attraction of international talent and promote the country’s digital economy.
How to meet the requirements for the Beckham Act?
If you do not comply with the 183 days in Spain or have the basis of your economic activities in the country, you can take advantage of a special regime with significant benefits, such as a fixed tax rate of 24% on the income obtained in Spain up to 600,000 euros, an amount much lower than you would pay if your presence in the country were longer.
(Visited 3 times, 1 visits today)
