Tax optimization and accounting

You become a tax resident of Spain if you spend more than 183 days a year in the country. Tax residency can also be recognized if your main economic interest is in Spain (for example, your business is registered here, you have opened a local sole proprietorship, or your family lives in the country).

Obtaining a NIE does not oblige you to anything. It is simply an identification number. A person becomes a tax resident only after living in Spain for at least 183 days in a calendar year/opening an Autonomous (local sole proprietorship)/Spain becomes the center of family interests (for example, a child goes to kindergarten).

These are two interconnected processes that go hand in hand. Without registration in the Spanish social security system (Social Security), it is impossible to officially register as a self-employed person (autonomos). In addition to paying taxes, autonomos are required to pay their social security contributions on time.

When you first register with Social Security, you can take advantage of a reduced rate of 80 euros per month. This rate is valid for the first year and can be extended for a second year if your annual income is below the established minimum interprofessional salary (SMI).

In some regions of Spain (for example, Madrid and Andalusia), there is a program under which the social security contributions for new autonomos in the first year are refunded, making it effectively free. From 2024, this program is being expanded and will also be available in the Canary Islands, Extremadura, Galicia, the Balearic Islands and La Rioja.

The conditions for renewal for a second year remain the same: annual income must be below the established SMI.

After the grace period (1-2 years) ends, social security contributions are calculated based on your income.

Digital nomads in employment or startups can benefit from the Beckham regime, which applies a flat rate of 24% on income earned in Spain. Worldwide passive income and dividends are not declared. This tax regime must be requested separately.

The reporting period depends on the type of tax:

• Personal Income Tax (IRPF) – annually, the declaration is submitted from April to June.
• Value Added Tax (IVA) – usually quarterly.
• Corporate Tax (IS) – annual declaration, the deadline depends on the company's reporting period.

It is important to follow the established deadlines to avoid penalties.

If you are a tax resident of Spain, you are subject to tax on your worldwide income. This means that income received from abroad is subject to Spanish taxes. In such cases, tax optimization options may be considered, such as the use of double taxation agreements or other tax deductions.

Property owners in Spain pay a municipal property tax (Impuesto sobre Bienes Inmuebles, IBI), which is calculated based on the cadastral value. It is usually 0.4-1.1%, with each municipality setting its own rate.

If the property is rented out, you must pay a non-resident income tax (Impuesto sobre la Renta de No Residentes, IRNR) of 24% of the profit, with the possibility of deducting expenses. If the property is not rented out, the tax is still calculated on the “deemed income”.

Yes, the autonomos are required to keep records of their income and expenses and file declarations quarterly and annually. This includes:

• Income tax (IRPF).
• VAT (IVA), if your activity is subject to this tax.
• Social security contributions (Seguridad Social).

There are 4 options:

• 1. Use the Beckham regime for new residents.
• 2. Use tax deductions.
• 3. Consult with a tax specialist to avoid mistakes and penalties.

Our lawyers will help you correctly fill out declarations and apply all possible tax deductions.

For late filing of a declaration or non-payment of taxes the following is possible:

• Fines (from 50 to 150% of the amount owed).
• Penalties for late payment (0.5% for the first month, then the percentage increases).
• Blocking of accounts and possible problems with migration documents.