The 2025 Income Tax Campaign begins on April 8 and will end on June 30, 2026.
In today’s globalized environment, it is increasingly common to find individuals relocating to Spain (inbound expatriates) or moving abroad (outbound expatriates), generally for work-related reasons. It is also common to encounter individuals who, while being tax residents in Spain, make investments abroad and receive income from other countries.
At Feliu N&I, we specialize in tax returns with an international component. In this circular, we outline the main aspects that may affect your Personal Income Tax return and explain how we can assist you.
1. Tax residency: the first aspect to review
The first key aspect to review is the determination of tax residency. It must be assessed whether the requirements to be considered a tax resident in Spain are met, or whether the individual is considered a non-resident.
Tax residency is always determined by domestic law, meaning that each country’s internal legislation establishes the criteria for considering a person a tax resident. Double Taxation Treaties only contain provisions to prevent dual tax residency, operating through tie-breaker rules.
Specifically, an individual is considered a tax resident in Spain if they have spent more than 183 days during the calendar year in Spanish territory, or if their center of vital or economic interests is located in Spain.
With regard to registration obligations, please remember that any changes must be reported to the Spanish Tax Authorities (AEAT), whether related to your address or your status as a tax resident or non-resident.
2. Exemption for income obtained abroad — Article 7.p) of the Personal Income Tax Law
If you are considered a tax resident in Spain and have worked abroad for employment-related reasons, you may apply the exemption provided under Article 7.p) of the Personal Income Tax Law, up to a limit of €60,100 per year, provided that the legal requirements are met. Depending on your specific situation, you may also consider applying the exempt excess regime.
At Feliu N&I, we have extensive experience in managing this exemption:
- We assist in preparing and validating compliance documentation required to justify the effective assignment abroad and fulfillment of legal requirements.
- We calculate exempt income, accurately determining the portion excluded from the Personal Income Tax base.
- We prepare supporting documentation to substantiate the exemption applied.
- We provide assistance and follow-up in case of inquiries from the AEAT, supporting you throughout the verification process if necessary.
Our experience is supported by numerous favorable resolutions obtained by our clients from the AEAT in relation to this matter.
3. International double taxation
If you are considered a tax resident in Spain and any income obtained abroad has been taxed in the country of origin, you may apply the international double taxation deduction, thus avoiding being taxed twice on the same income. This deduction applies provided it is in accordance with a Double Taxation Treaty signed by Spain with the relevant country, or under applicable domestic legislation, and subject to compliance with established requirements.
At Feliu N&I, we are experts in applying and validating these deductions:
- We analyze the various Double Taxation Treaties signed by Spain with different jurisdictions, determining the applicable regime for each type of income.
- We validate the eligibility and amount of deductions, ensuring they are correctly applied in the tax return.
- We optimize the taxpayer’s tax position within the legal framework, legitimately minimizing the overall tax burden.
4. Special Regime for Inbound Expatriates — Beckham Law
If you relocate your tax residence to Spain and meet certain requirements, you may consider opting for the Special Regime for Inbound Expatriates (commonly known as the “Beckham Law”). Under this regime, although you are a tax resident in Spain, you will be taxed under the Non-Resident Income Tax rules for five tax years, providing a significant tax advantage above certain income levels.
This option must be requested within six months from the date of registration with the Spanish Social Security system, or from the date stated in the Social Security coverage certificate from the country of origin in the case of an international assignment.
Following the entry into force of Law 28/2022 of December 21 (“Start-Ups Law”), some requirements have been relaxed and the range of eligible taxpayers has been expanded, including so-called “digital nomads” and professionals relocating to Spain to carry out activities classified as entrepreneurial.
At Feliu N&I, we are experts in all aspects of this Special Regime:
- We prepare annual tax returns under the Special Regime, with full knowledge of applicable regulations and AEAT criteria.
- We advise on which types of income are included or excluded from the special taxable base, avoiding errors that could result in significant tax costs.
- We pay particular attention to taxpayers transitioning from the Special Regime to the General Personal Income Tax regime, as the transition year presents specific complexities requiring careful analysis to ensure full compliance.
5. Wealth Tax
In addition to Personal Income Tax, taxpayers with an international component must review their obligations regarding Wealth Tax, which differs depending on their status:
Tax residents in Spain — Personal obligation
If you are a tax resident in Spain, you are required to pay Wealth Tax on your worldwide assets and rights, regardless of their location, subject to applicable limits and reductions. This is known as a personal obligation to contribute.
Non-residents in Spain — Real obligation
If you are not a tax resident in Spain but own assets or rights located in Spanish territory, you are required to pay Wealth Tax only on those assets and rights located in Spain. This is known as a real obligation to contribute.
At Feliu N&I, we are experts in advising and preparing both types of returns, analyzing asset valuation, applicable reductions and allowances, and the correct determination of the taxable base in each case.
6. Non-resident taxpayers
If, according to applicable regulations, you are considered a non-resident taxpayer in Spain, you will be taxed on income obtained in Spain in accordance with the Non-Resident Income Tax Law. We recommend reviewing whether you have tax obligations in Spain and ensuring compliance in due time and form.
Request advice
Contact us for advice to analyze your situation and assess whether any of these aspects may impact your registration and/or tax obligations.
