Taxes in Spain for Americans: residency, rates, wealth tax and the Beckham law

Tax is the part of a move to Spain that Americans most often underestimate. Spain taxes its residents on worldwide income, has a wealth tax, and asks for a report of assets held abroad. None of it is a reason not to go, but it should be planned before you arrive, with a professional. This page explains the main rules so you know what to ask.

This is general information, not tax advice. Rates and allowances change, and regions set many of their own.

When you become a Spanish tax resident

You are generally resident for tax if any of these apply:

• You spend more than 183 days in Spain in a calendar year. Temporary absences usually count as time in Spain.
• The main centre of your economic or business interests is in Spain.
• Your spouse and dependent minor children live in Spain, unless you show otherwise.

This is separate from immigration status. In practice the two line up, because renewing a non-lucrative visa requires living in Spain for most of the year.

Spain’s tax year is the calendar year, and you are normally resident or not for the whole year. That makes your arrival date matter. Arriving after the start of July usually means you aren’t resident for that year.

What residents pay

Tax	What it covers	Approximate rates
Income tax on general income	Salary, self-employment, pensions, rental income	Progressive, from about 19 percent to the mid or high 40s, depending on the region
Income tax on savings income	Interest, dividends, capital gains	Progressive, from about 19 percent to about 30 percent
Wealth tax	Worldwide net assets above the allowance	Progressive, roughly 0.2 to 3.5 percent, set by the region
Inheritance and gift tax	Paid by the person who receives	Varies widely by region and relationship

Income tax is split between the state and the region, so the same income is taxed differently in Madrid, Catalonia, Valencia and Andalusia. Returns are filed between April and June for the previous year.

The wealth tax

Residents pay wealth tax on worldwide net assets on 31 December each year. Under the national rules there is an allowance of €700,000 per person, plus up to €300,000 for a main home. Regions can change the allowances and rates, and some, including Madrid and Andalusia, have rebated the regional tax almost entirely.

A separate national tax on large fortunes applies to net wealth above €3 million, wherever in Spain you live. Non-residents pay wealth tax only on assets in Spain.

For Americans with retirement accounts, a US home and investments, the wealth tax can be significant, and the region you choose matters. Ask an adviser to model it.

The foreign asset report

Spanish residents with assets abroad worth more than €50,000 in any of three categories (bank accounts, investments and insurance, and real estate) report them on an information form known as Modelo 720, filed early the following year. No tax is due on the form itself. Most American residents have to file it in their first year.

The Beckham law

Spain’s special regime for inbound workers got its nickname from the footballer who was among the first to use it. People who qualify are taxed as non-residents while living in Spain:

• A flat 24 percent on Spanish employment income up to €600,000, and a higher rate above that.
• Foreign investment income and gains generally stay outside Spanish tax.
• Wealth tax only on Spanish assets.
• It lasts for the year you arrive and the following five.

The main conditions are that you haven’t been a Spanish tax resident in the previous five years, and that you move because of a job, a transfer, a company directorship or, since 2023, remote work for a foreign employer under the digital nomad visa. Certain entrepreneurs and highly qualified professionals are covered too.

It doesn’t cover retirees on a non-lucrative visa, and ordinary freelancers generally don’t qualify. You apply within six months of being registered with Social Security in Spain, and a missed deadline can’t be fixed. The regime also limits how treaty relief works, which can matter for US citizens. Take advice before choosing it.

How the US fits in

US citizens and green card holders file a US return on worldwide income every year, wherever they live. For a Spanish resident:

• Spain usually taxes first on income earned while resident, and the US gives a credit for Spanish tax paid.
• The US-Spain tax treaty decides which country taxes what. It lets the US keep taxing its own citizens, so it reduces double taxation without removing the US filing.
• Social Security and government pensions have their own rules in the treaty and are treated differently from private pensions and retirement account withdrawals.
• US tax shelters don’t always carry over. Spain doesn’t necessarily treat Roth accounts, municipal bond interest or the US home sale exclusion the way the US does.
• Investment funds are a trap in both directions. Non-US funds bring heavy US reporting, and some US funds can’t be bought by EU residents.
• Foreign account reports to the US (FBAR and FATCA forms) apply once your Spanish accounts pass the thresholds.

See US taxes when you live in Spain for what to ask a preparer.

If you don’t become resident

People who spend less than half the year in Spain are taxed only on Spanish income, at a flat rate, which is generally 24 percent for residents of countries outside the EU. Owners of Spanish property pay a yearly non-resident tax on it even if it isn’t rented. See buying property in Spain.

What to do before you move

1. Get advice from someone who handles both Spanish and US tax, or two advisers who talk to each other.
2. Decide your arrival date with the tax year in mind.
3. Consider selling assets with large gains, including a US home, before you become resident.
4. Ask how each retirement account will be taxed in Spain.
5. Compare regions if your assets are above the wealth tax allowance.
6. If you are moving for work, find out whether the Beckham law applies and note the deadline.

Common questions

When do you become a tax resident in Spain?

Generally when you spend more than 183 days in Spain in a calendar year, or when your main economic interests are in Spain. You are also presumed resident if your spouse and dependent children live there. Short trips abroad usually still count as days in Spain.

What is the Beckham law in Spain?

It is a special regime for people who move to Spain for work and haven't been Spanish tax residents in the previous five years. They can choose to be taxed as non-residents for the year they arrive and the next five, paying a flat rate of 24 percent on Spanish employment income up to €600,000. It has to be applied for within a few months of starting work.

Does Spain have a wealth tax?

Yes. Residents are taxed on worldwide net assets above an allowance, which is €700,000 per person under the national rules, with a further allowance for a main home. Regions set their own allowances, rates and rebates, and a separate national tax applies to net wealth above €3 million.

Do Americans pay tax in both Spain and the US?

They file in both. US citizens file a US return every year wherever they live, and Spanish residents file in Spain on worldwide income. The US-Spain tax treaty and foreign tax credits prevent most double taxation, so the usual result is paying the higher of the two countries' rates on each type of income.