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Reader question: Can I be a non-resident for tax purposes with Spain’s non-lucrative visa?

Reader question: Can I be a non-resident for tax purposes with Spain's non-lucrative visa?
A British bar in Benalmadena in Malaga province. Photo: Jorge Guerrero/AFP
The non-lucrative visa is one of the most sought-after methods third country nationals such as Americans, Chinese and now UK nationals use to be able to spend more than 90 days at a time in Spain. But does it involve having to become a tax resident?

Spain’s visado no lucrativo – colloquially referred to as the retirement visa in English-speaking spheres – is the preferred means for non-EU nationals with sufficient savings/income to get round the 90 out of 180 days rule. 

As the name suggests, your time and business in Spain has to be non-lucrative, so it’s not for people who intend to study, invest or work but rather those who have the financial means to take care of themselves and their families, as well as their health costs. 

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So if you’re not working in Spain, surely you don’t need to pay taxes in Spain, right?

Surprisingly for some perhaps, you actually do. Spain’s non-lucrative visa is a residency visa, so you have to spend more than 183 days in the country for it to remain valid, especially if you want to renew it after the first year (the first visa lasts one year, the next two renewals last two, and after five years you can apply for a long-term visa). 

 If you remain more than 183 days in Spain, you are officially considered a tax resident.

Therefore, you have to pay income tax on your worldwide income and you should check if there are double taxation agreements between your country and Spain. 

If you buy a property in Spain, and especially if you let it out for part of the year, you will also be subject to tax. 

It’s true that you could technically use this visa to spend more than 90 consecutive days but fewer than 183 and therefore not be considered a tax resident, but this isn’t a scheme that will necessarily work out for you in the long run. 

Keep in mind that Spanish migration officials will have a record of your visas and they may question why you keep having to reapply for the non-lucrative visa from scratch. 

If you want to spend more than 90 consecutive days in Spain without becoming a tax resident, Spain’s golden visa may be a better option for you, if you can afford it. 

This usually involves buying a property worth at least €500,000, and if you spend less than six months in Spain you will only have to pay taxes on your assets in Spain and won’t lose your residency either given your sizable investment (you’ll have to visit Spain at least once a year). 

However, spend more than half a year in Spain or have the main core of your economic activities in Spain and you will be subject to paying tax on your worldwide assets and income.

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