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TAX

La Renta: How to find out if you’re owed or owe money on your annual Spanish tax return

Before making and submitting your Spanish income tax return, you can find out how much you might have to pay or be paid back, by filling out an online simulator. Here's our step-by-step guide on how to do this.

Spanish tax simulator
Spanish tax simulator. Photo: Campaign Creators / Unsplash and Agencia Tributaria

The declaración de la renta is Spain’s annual income tax return, which anyone residing in Spain earning over €22,000 a year, is self-employed (autónomo), or moved here in the last year, must complete. 

Find out more about who needs to fill out an income tax return in Spain here

Filling out your tax return can be a complicated process and you may want to know ahead of time how much you may have to pay so that you can prepare. Now that the declaración de la renta campaign for 2021 is open (you can present your tax return from April 6th to June 30th 2022), you are able to use the Tax Agency’s online simulator to find out. 

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

How does it work?

The 2021 income simulator is an online version of the Agencia Tributaria portal that makes it possible to simulate the declaration without actually having to submit your data or having to validate your ID with a digital certificate. It doesn’t affect your tax return at all, so can it simply be used for your own purposes to find out how much you will have to pay or even if the Tax Agency will return some of the money you’ve already paid. 

As it works simply as a simulator however, you are not able to transfer any of the data over into your real declaration and you will have to complete it all over again when the time comes. 

How do I access and complete the simulated tax return?

Step 1:

The first step is to access the simulator which can be found on the Agencia Tributaria’s website here. Click on the button that says ‘Renta Web Open Simulador‘ to access it. 

A window will open asking if you want to create a new simulated declaration or if you want to open one that you’ve already previously saved. If this is your first time accessing the simulator, simply click on the button that says ‘Nueva declaración‘. 

Spain tax return

New simulated tax declaration. Photo: Agencia Tributaria

Step 2:

The simulator will then open up a new declaration page for you. You are able to choose between a few different languages spoken in Spain, but unfortunately English isn’t one of them.

Here, you need to fill out your personal details, such as name, NIF (número de identificación fiscal), marital status, any dependent children or dependent adults over 65 who are living with you. You will also need all details of your dependents such as ID numbers and birth dates.

When you have completed this page, click on ‘Aceptar’ at the bottom to continue.

Fill in your personal details on the first page. Photo: Agencia Tributaria.

Step 3:

The next page will take you to the financial part of the simulator. Here, you will see lots of different sections and the corresponding amounts. You will also see a separate section detailing the amounts for your civil partner or spouse, if you have stated that you have one.

At first, everything will simply say €0,00, but you can click on any of the numbers to change them or fill out the details so that the program will work out the amount for you. 

Spanish income tax simulator. Photo: Agencia Tributaria

Some of the numbers will open up new windows where you can fill out the information about details such as your salary or any compensation you received.

From this screen, you are only able to change the numbers in your section, but if you want to fill in details for your civil partner or spouse, click on the box that says ‘Modalidad’ in the top right-hand corner. From here, you’re able to select a different person. This may help you to work out whether it would be better financially to submit your real declaration with your partner or alone. Remember, you are not able to enter both sets of numbers on the same screen.

Spanish tax simulator

Click on ‘modalidad’ to access the amounts for your spouse. Photo: Agencia Tributaria

Step 4:

To access different parts of the declaration, click on the ‘Apartados’ button in the top left-hand corner of the screen. This will bring a drop-down menu of all the different sections of the tax return, so that you can access them directly, rather than having to scroll through each section.

Spanish tax simulator

Click on ‘Apartados’ to access different sections of the form directly. Photo: Agencia Tributaria

Step 5:

Before looking at your final calculation, click on the ‘Validar’ button next to ‘Apartados’ to see if there are any errors anywhere in your return. The program will advise you on what to do if there are.

Click on ‘Validar’ to see if you’ve made any mistakes. Photo: Agencia Tributaria

Step 6:

To save your simulated return so that you can complete it later, just click on ‘Guardar’ or save at the top.

Spanish tax simulator

Save your simulated return at any time by clicking on ‘Guardar’. Photo: Agencia Tributaria
 

Step 7:

When you have completed each section, checked for errors and are happy with everything, click on ‘Resumen de declaraciónes’. This will take you back to the original screen with all the numbers and amounts on, where you can now see your final result at the top. 

Click on Resumen de declaraciónes to see your final calculation. Photo: Agencia Tributaria
 
Click on ‘Vista Pevia’ to be able to download your simulated tax return as a PDF. You can then use this PDF and the amounts to help you fill out the real tax return later. 
 
Spanish tax simulator

Click on ‘Vista Previa’ to download a PDF of your results. Photo: Agencia Tributaria

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For members

WORKING IN SPAIN

Do I have to register and pay taxes in Spain if I’m a remote worker?

With the rise of remote working, many foreigners are looking to move to Spain whilst holding on to their jobs back home. But do you have to register and pay taxes in Spain if you're working here remotely? Here's everything you need to know.

Do I have to register and pay taxes in Spain if I'm a remote worker?

Picture this – your company has decided that you no longer need to go back to the office after the Covid-19 pandemic and you can continue to work remotely from wherever you want, perhaps from another country.

You may decide to move to Spain, attracted by its good weather, great food, lower cost of living and many other perks, including the fact that already having a job resolves one of the major obstacles of living in the country.

However, this is where it gets complicated and you start asking questions – do you have to register and pay tax in Spain if you’re working remotely and is tax already deducted from your salary in the country where you previously lived and worked?

Many people are confused by this and online forums are filled with comments claiming that they don’t need to pay tax because they’re not working for a Spanish company or don’t have any Spanish clients.

So do remote workers whose work has nothing to do with Spain have to pay tax in Spain?

In short, the answer is yes. If you live in Spain for more than 183 days, you must pay tax here. Regardless of where your company or clients are based, if you are physically living in Spain and working from here, you are liable to pay tax.

On their website, the Spanish government states that if you’re resident in Spain you “must pay tax in Spain on your worldwide income, i.e. you must declare in Spain income obtained in any part of the world”.

But what if I’m already taxed on my salary back in my home country?

If you have a permanent remote job, you may already be paying tax on your salary back in your home country. Technically though, if you no longer live in that country, you shouldn’t be paying tax there. You should really only be paying tax in Spain if you decide to move here.

While Spain does have double taxation agreements with several countries, including a treaty for the avoidance of double taxation with the UK and the US, you are still expected to declare your income in Spain.

How do I register legally as a remote worker in Spain?

As Spain’s digital nomad visa is still not up and running yet, and all the details of how this will work haven’t been released by the Spanish government, there are currently limited options of how to legally register and pay taxes as a remote worker in Spain.

Below we outline the options for EU and non-EU citizens.

EU citizen

If you’re an EU citizen, you can simply move to Spain without the need for a visa. However, you will need to register your residency here within the first three months. One of the easiest ways of declaring the income you earn from your remote job is to register as self-employed or autónomo.

Ideally, your company would stop paying you a salary with the tax already deducted and you would simply invoice your company every month for your wage. You would then be responsible for declaring and paying your own taxes.

As an autónomo, you will declare and pay your taxes every three months. You will then also have to submit an annual tax declaration in June each year.

You should be aware that as an autónomo in Spain you will more than likely pay more taxes on your remote income than you did back in your home country. This is partly because of the higher social security fees you will be charged, regardless of how much you earn. Currently, it’s €294 per month (€60 for the first year and working progressively up to €294 over the course of the second year).

The income tax bands also mean that you may end up paying more personal income tax in Spain as well, particularly if you are a low to mid-earner. 

READ ALSO – Self-employed in Spain: What you should know about being ‘autónomo’

Of course, not all companies are happy to do this, so you will need to speak with them and see what your options are. You should also talk to a gestor or tax advisor in Spain for your particular situation to see if there is another option of declaring your income here.

This could include creating a subsidiary company here and being paid a salary from that company, or finding an international accounting company that could arrange for you to be paid as a Spanish employee. Again, thess options are not necessarily available to most remote workers.

READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one

Non-EU citizen

If you’re from a non-EU country, you first have the challenge of getting a visa to legally be allowed to live in Spain for longer than 90 days, even before you start thinking about how to register as a remote worker and if you need to pay tax on your income.

Unfortunately, there’s currently no visa that allows you to simply move to Spain and work remotely. As mentioned above, Spain’s digital nomad visa is still not in operation yet. Here’s everything we know about it so far.

For a working visa, you have to be offered a job in Spain and be sponsored by a company that can prove that the job can’t be filled by someone else in the EU. For an entrepreneur visa you have to set up a business in Spain with an economic interest for the country and with a student visa, you’re only allowed to work 20 hours a week.

READ ALSO – Worker, retiree or investor: What type of Spanish visa do I need?

One option is the Golden Visa, which will allow you to work in Spain and register as an autónomo like above, but the catch is that you’ll have to have a spare €500,000 to spend on a property here before you can.

Many people mistakenly believe that they can work remotely on the Non-Lucrative Visa or NVL, however as the name suggests you can’t work on this visa. As mentioned above, the Spanish government says that you have to declare tax on your worldwide income, so if you continue to work for your company or clients abroad during this time and get found out, you could incur hefty fines.

Particularly since the start of the Covid-19 pandemic and the rise in remote workers, Spanish consulates have been rejecting NVL applications from anyone they believe might be trying to continue working remotely while they’re here.

If you don’t have €500,000, one of the best options is to apply for the NVL and take a sabbatical from your job for a year or quit your job when you move here.

Then after the year is up, you can exchange your visa for a different residency permit that allows you to become self-employed (autónomo). You can then start working remotely for your company again if you’ve been on sabbatical or apply for a new remote job and start working and declaring your taxes legally in Spain. 

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