Understanding the tax implications of being a Spain Golden Visa holder is crucial for compliance. This includes paying income tax on worldwide income and potentially facing wealth tax on global assets.
Spain Golden Visa holders face several tax considerations, which can vary based on their residency status and the nature of their investments. Here’s a detailed overview of the key tax implications:
1. Tax Residency Status
- Non-Resident vs. Resident: The tax implications for Golden Visa holders depend largely on whether they are considered tax residents in Spain. You are generally considered a tax resident if you spend more than 183 days in Spain within a calendar year. If you are a tax resident, you are subject to Spanish taxes on your worldwide income. If you are a non-resident, you are only taxed on income generated within Spain.
2. Income Tax
- Non-Residents: Non-resident Golden Visa holders are subject to a flat tax rate of 24% on income earned in Spain, such as rental income from property. They are not required to pay taxes on income earned outside of Spain.
- Residents: Residents are subject to progressive income tax rates on their worldwide income. The rates range from 19% to 47%, depending on the level of income.
3. Wealth Tax
- Applicability: Spain imposes a wealth tax on the net assets of residents and non-residents. For residents, the tax applies to worldwide assets, while non-residents are taxed only on assets located in Spain. The wealth tax rates vary by region but generally range from 0.2% to 2.5%.
- Exemptions: Each individual has a tax-free allowance, which is typically €700,000, plus an additional €300,000 for their primary residence. Assets above this threshold are subject to a wealth tax.
4. Capital Gains Tax
- Sale of Property: If a Golden Visa holder sells their property in Spain, they may be subject to capital gains tax. Non-residents pay a flat rate of 19% on capital gains from the sale of Spanish property. Residents are subject to progressive rates ranging from 19% to 23% on capital gains.
- Exemptions for Residents: Spanish residents may be eligible for certain exemptions, such as when reinvesting in a primary residence or when the seller is over 65 and selling their primary residence.
5. Inheritance and Gift Tax
- Varies by Region: Inheritance and gift tax is levied on the recipient of an inheritance or gift, and the rates vary significantly depending on the region of Spain. Residents are taxed on worldwide assets, while non-residents are taxed only on assets located in Spain.
- Allowances: There are allowances and deductions available, depending on the relationship between the donor and recipient, the value of the inheritance or gift, and the region.
6. Double Taxation Treaties
- Avoiding Double Taxation: Spain has double taxation treaties with many countries to prevent double taxation on income and assets. These treaties typically allow for tax paid in Spain to be credited against tax liabilities in the visa holder’s home country, or vice versa.
- Consultation Required: It's essential for Golden Visa holders to consult with a tax advisor who is knowledgeable about both Spanish tax law and the tax laws of their home country to ensure they are complying with all obligations and making the most of any available treaties.
Summary
The tax implications for Spain Golden Visa holders depend on their residency status. Non-residents are taxed only on income generated in Spain, while residents are subject to taxes on worldwide income, wealth tax, capital gains tax, and potentially inheritance tax. Double taxation treaties may provide relief. It is crucial for Golden Visa holders to seek professional tax advice to navigate these obligations effectively.