Income tax return for foreigners with Golden Visa
19 Abril, 2023
Some people are concerned about the question of whether the Golden Visa Spain carries certain tax obligations such as the obligation to make the income tax return.
First of all, what can be considered as income for the payment of income tax?
Wages earned as an employee and what is earned as a self-employed through invoices; capital gains that come, for example, from dividends; and pension contributions and benefits. These are, broadly speaking, the incomes that should be taxed under this tax.
As a general rule, if someone is considered a tax resident in Spain, they will have to pay income tax for their income and earnings worldwide.
As we can see to determine exactly what specific taxes are paid in Spain as a foreigner and what the amount is, you must first know if you are a resident in tax terms or not.
This distinction, as we mentioned, has a purely fiscal character, and has nothing to do with the residence permit that can be possessed to live legally in the country. This means that you may or may not have obtained a formal residence permit, but if you meet the requirements that we will now discuss, you will still be considered a resident for tax purposes.
How can I know if you are a tax resident in Spain?
An alien will be considered a tax resident if he meets one of the following three requirements:
- Live in Spain more than 183 days per year (we must take into account that the days do not have to be consecutive for them to count as effective).
- Have economic interests in the country, which means that you carry out your professional activity in Spain, either working for a company or working on your own.
- The spouse and/or children live in Spain.
An investor with a Golden visa will be considered a tax resident in Spain, in a certain tax period, to the extent that any of the circumstances expressed are present.
So how should you pay exactly for this assumption?
That will depend on the exact revenue you generate around the world. This means that this tax is progressive and works as follows:
- Below the first €12,450 earned, 19% of income tax will be paid.
- From €12,450 to €20,200, the Spanish Tax Agency will be paid 24%.
- From €20,200 to €35,200, 30%.
- From €35,200 to €60,000, 37%.
- And above €60,000, 45%.
However, what if you are not considered a tax resident?
Well, in that case, you will only have to pay the income tax on the income that has been generated in Spain. Non-residents with urban properties for their own use in Spain must pay each year (until 31 December of the following year) the Non-Resident Income Tax (IRNR) on a fictitious income (usually 1.1% cadastral value). Community citizens currently pay 19% and non-EU citizens 24%.
A clear example of the above is found in the person of Chinese nationality, who has a property in Spain. In that case, taxes will only be charged on all income generated in the Peninsula.
