# US citizen - income taxes in Spain?



## Mares18 (Feb 18, 2018)

Hello all, I hope this is the right place to post this. We are a US family in our 30s with elementary aged kids. We are moving to Spain this June to live for at least a year. I know this questioned has been asked before - and I’ve seen the tax treaty doc - but I am still just not clear if we will be liable for income tax in Spain. Husband and I both work remotely for US companies. Well, I freelance with biggest client and main source of income from the US. We are coming over on non-lucrative visas. If we are paying US taxes, do we need to pay Spanish income tax? We will just exceed the 183 days based on our current arrival plan but I would hope the treaty means that someone making average income would not be liable to 2 countries for taxes? i have left more messages than I can count at the Spanish tax office at our local consulate and never get a return call. Any insight or clarification would be so helpful.


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## Nononymous (Jul 12, 2011)

According to one theory, once you are settled in Spain for more than 183 days, you'd be tax resident and should pay Spanish tax on US-source income. You would not be taxed twice - you'd either claim the FEIE or a foreign tax credit to reduce your US income tax. (Might be a bit of paperwork to sort that all out though, especially if one of you has a regular salary from a US employer.)

In practice, if the Spanish authorities granted you a non-lucrative visa knowing that you'd be working remotely to support yourself (as opposed to just having a pile of money saved) then they may be saying that they don't expect you to pay Spanish taxes on that "offshore" income for a temporary stay. I would simply not worry about it - continue filing in the US as if you were resident, and enjoy your stay in Spain.

I've heard a few reports now that Spain is willing to grant non-lucrative visas to people who want to live in Spain for a year or two while working remotely (i.e. not competing for jobs in the local labour market) even though the original intention was that one lived on savings and didn't work. I'm not sure what the intention is in terms of taxes, but I think a good rule of thumb is that for up to a year, they won't expect income tax. You'll be doing enough good paying rent and local VAT. Signing up for the Spanish health care system may change that calculation, however.

PS on edit - I have no practical experience with Spain, only with another European country. Above advice based on skimming other forums, and probably not worth much.


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## Bevdeforges (Nov 16, 2007)

I don't know the visa system in Spain, but the French do seem to do things like this all the time. As long as you disclosed your remote working at the time you applied for your visa (usually they ask you how you're planning on financing your stay) and particularly if they required that you have private health insurance (so you aren't using the national system), I'd say you're safe in just declaring and paying your US taxes.

The tricky part comes if you should decide to stay on in Spain, because then you'd need to register for Spanish taxes and social insurances for sure. However, as long as you return in a year or two I suspect you'll probably be OK.
Cheers,
Bev


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## Mares18 (Feb 18, 2018)

Thank you both for your replies! Hate to sound dense that I just can’t get thru that tax treaty to glean exactly what it means. We qualify for the NL visa baed on income and working status and our in the process of gathering the copious documents required for our embassy appt. As it stands now, we would just exceed 183 days in tax year 2018 and then perhaps again in tax year 2019. For now the plan is 11-12 months only. Should we change our minds, I suppose we will tackle it then. So.. I hope you all right and about the taxes - and I’m incline to agree that it makes sense tho hope it’s not wishful thinking on my part! But if no Spanish income tax for us then what about public school? Would the rationale be that we are paying property taxes thru our rental that funds the local schools? We are planning on public or concertado and I know free can’t really be...free. We need to -and should a pay our fair share somehow.


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## Bevdeforges (Nov 16, 2007)

If you don't yet have the visa in hand there are, obviously, issues that could arise. Generally speaking, the issue is one of being up front with the Consular officials when you apply. I'm fairly sure they will ask you how you will finance your year in Spain - and in that case, you should be up front and honest about the situation. 

You'll have to see what the situation is on the ground about school (and maybe ask the question over in the Spain forum). 
Cheers,
Bev


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## Nononymous (Jul 12, 2011)

Public school is free. When academics go over on sabbatical for a year or more they pay no income tax due to being on an exchange, but their kids can go to school at no cost. (For what it's worth, schools are probably not financed through property taxes as in the US, which helps prevent absurd disparity between schools in rich suburbs and schools in poor cities.) 

Typically the tax treaty is used to decide how much tax is paid to whom in situations where an individual has income or assets in multiple countries. In your case, if you have no Spanish income and never enter the Spanish tax system, the treaty doesn't apply. So I wouldn't struggle to decipher it, or to count days to ensure that you stay under 183 during each calendar year.

The simplest thing for you is to assume you have no Spanish tax obligations, and only file US returns. Is that correct? My assumption would be that if Spain is willing to grant you a non-lucrative visa based on income from working remotely (for non-Spanish employers) then that is a tacit admission that you are not expected to pay Spanish taxes or social insurance. It's effectively the same situation as if you'd put $50k in the bank then come over to live for a year, sending your kids to school while lounging around the house. 

I have no idea how health insurance would work into this, but I assume you'd need to have private coverage and could not join the Spanish state system. If you decided to stay longer than a year, you'd need to readjust. But cross that bridge when you come to it.

Historical footnote. Until pretty recently it seemed that the non-lucrative visa was only granted if you could demonstrate sufficient savings or passive income (pension, investments, etc.) to support yourself. But at some point within the past few years they seem to be allowing remote work, at least for offshore clients or employers. This is a good and perfectly reasonable development. (You might find some cranky old Brits on the Spain forum who think that any working is either illegal and/or should be taxed, but that's becoming a minority view.)


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