One thing that Im frequently asked relates to tax residency. People living in Spain think that because they are paying their taxes back in their countries of origin, they are in peace with the tax office in Spain, but this is not truth..
You can only be treated as tax resident in one country or another, and due to this you will just pay your income tax just in one country.
Since the summer of 2014 there has been a wide media coverage on the EU ruling affecting Spanish Inheritance and Gift Tax. The existing tax legislation in Spain, at that time, created a situation of unequal tax treatment depending on whether the deceased and/or the inheritors were Spanish residents or not.
You may or may not know that a European regulation has been approved to regulate questions of jurisdiction, applicable law and enforcement of all successions where the deceased has passed away on or after the 17th August 2015 (Regulation No. 650/2012 of the European Parliament and of the Council of 4 July 2012).
This regulation can cause difficulties for those foreigners who have not made certain provisions regarding their last Will and Testament, especially for those habitually resident in Spain.
A new tax form was approved in Spain in 2013 by way of Order HAP/72/2013 (Tax form 720). The purpose of this is for the Spanish Tax Authority to collect information on any assets or rights of residents (mainly, although not exclusively) located abroad. This measure was adopted as a means of combating tax fraud by establishing a certain level of control over those with assets abroad. Continue reading
IBI (Impuesto sobre Bienes Inmuebles)
This is a tax charged by local Councils and paid by property owners.
All property within the Council’s area is included on a census and is given an Assessed Value (Valor Catastral). The amount of tax to be paid shall be calculated by applying the tax rate set by the City Council to this Assessed Value.