It’s time to present the income tax. Within the team of Match Better Valencia we have expertise in taxes. In Spain the income tax is called La Renta or Declaracion de la Renta de Personas Fisicas (IRPF) and the declaration must be made between April 6st and June 30rd over the previous year.

When do you pay taxes in Spain?

According to Article 9 of the Law, you must pay your taxes in Spain if you meet one of the following conditions:

• If the taxpayer stays on Spanish territory for more than 183 days in the calendar year.

• If the main economic activity and personal interests such as family or home are located on Spanish territory, even if the person stays less than 183 days on Spanish territory.

As soon as you meet one of these conditions, you are obliged to pay taxes in Spain. This means that you must complete and submit the Declaracion de la Renta de Personas Fisicas (IRPF) form 100 (exception for an expat tax agreement). The tax declaration is always concerning a calendar year from January 1st to December 31st over the previous year. The tax authorities offer the possibility to pay the tax in two parts: the end of June (60%) and the beginning of November (40%).

You must declare your worldwide income. That means it not only concerns your income from Spain, but also an income from another country. For example, consider rental income from renting out a home you own in the country of origin, profits you make over shares or interest on a bank account.

Capital Gains Tax

The profit from the sale of real estate from the country of origin must be declared and paid together with the income tax. The profit from the sale on which taxes has to be paid is the sales price minus all costs that are directly related to the sale, such as: brokerage fees, notary fees, VAT, registration fees, etc. It is therefore very important to collect all proof and receipts for this. If the sale leads to a loss, you must declare it, but no taxes have to be paid on it.

Exception! If the profit comes from the sale of a main residence and is invested again within two years in the purchase of a new home (main residence).

Double Tax Agreement

In some cases, you may declare taxes in your country of origin as well as in Spain. It then is very important to invest this properly in advance and avoid paying double taxes.

Do you have questions about taxes? Then contact our experts at Match Better Valencia.