Personal Income Tax
The personal income tax is called Impuesto sobre la Renta de las Personas Físicas (abbreviated as IRPF or RENTA) in Spanish. The tax law requires all residents in Spain to file a return and pay it by a set deadline.
Do I have to file a RENTA return for my investments in Spain?
The Spanish Personal Income Tax Act provides that all residents in Spain, regardless of nationality or type of residence permit, are required to file a personal income tax return.
From the point of view of tax law, a person is considered a resident if he or she has lived in Spain for 183 days in a year. If you do not live for more than 183 days in a year, you will have to pay non-resident tax.
The difference between personal income tax and non-resident tax.
Personal income tax: you need to declare your income worldwide. It means that you live in Spain for 183 days and you need to pay tax on your income in Spain as well as outside the country.
For example, if you live in Spain, but have income in another country, then the income in China will also be taxed in Spain.
Note: Spain have signed an international treaties with many other countries for the prevention of double taxation.
Non-resident tax: you only need to declare your income in Spain. For example, if you do not live in Spain, but you have a property in Spain to rent, the rent you receive will be taxable. You do not have to declare your income outside Spain.
Related article: Income tax for non-residents
Do I have to declare RENTA if I have no income in Spain?
Yes. This is because the personal income tax for residents is imposed on the global income. In other words, residents in Spain will be taxed in Spain on their income from other countries.
The law considers that since you live in Spain and have access to national resources and benefits, you are obliged to pay taxes here.
Therefore, if you are a resident of Spain, you also need to declare your income outside. Normally, income from abroad may not be detected by the Spanish tax authorities if they are not transferred to Spain.
In recent years, the Spanish government has been emphasizing the exchange of financial information with other countries.
In order to know the information of residents’ property abroad, Spanish law also stipulates that all residents are obliged to declare their property abroad. If you have savings or assets of 50,000 euros outside Spain, you should declare them.
Related article: Declaration of foreign properties as Spanish resident
Will not declaring RENTA affect my residence permit?
The law states that one of the factors to be taken into account when considering the extension of residence is whether or not the applicant owes taxes. For foreigners who live and work in Spain, it is easier for the Spanish government to know their income status (for example, through social security records). Therefore, the immigration authorities are more lenient and do not deliberately check for tax arrears when changing residence. On the other hand, the immigration office will check if the applicant has paid the full amount of taxes, and sometimes even ask for a certificate of non- payment of taxes.
