# Wahoo--US and Spain tax treaty



## Elyles (Aug 30, 2012)

For those Americans who have asked about the Tax treaty between the US and Spain. Go to the IRS website and download form #8802 and the 15 pages of instructions with it or just google form 8802. It certifies Tax Residency country. Apparently with this form, an American does not pay income taxes in Spain on worldly income. One only need to state that they have the form. If ever asked for it, one will need to produce it. Our accountant here and my wife recently discovered this. This will not apply to any income in Spain which of course will require payment of appropriate income taxes. It is great news for those of us who are retired Americans with US investments. As appropriately so, a resident of Spain is required to pay real estate taxes.


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## latfla (Jul 1, 2013)

Elyles said:


> For those Americans who have asked about the Tax treaty between the US and Spain. Go to the IRS website and download form #8802 and the 15 pages of instructions with it or just google form 8802. It certifies Tax Residency country. Apparently with this form, an American does not pay income taxes in Spain on worldly income. One only need to state that they have the form. If ever asked for it, one will need to produce it. Our accountant here and my wife recently discovered this. This will not apply to any income in Spain which of course will require payment of appropriate income taxes. It is great news for those of us who are retired Americans with US investments. As appropriately so, a resident of Spain is required to pay real estate taxes.


Excellent info, thanks.


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## lorort (Dec 24, 2015)

Good to know. Thanks Elyles


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## ptjd (May 27, 2015)

Hey Elyles, thanks for the info it just seems too easy! I generate no income in Spain but was planning to pay Spanish taxes ,actually would rather pay Spainish taxes as I live here but do not want to pay for both. Can you PM me your tax advisers info in Jaca, I will get in touch with them in a few months. Thanks!


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## Ole21 (Mar 6, 2019)

This is really interesting! We have been trying to figure out a way around paying in both the US and Spain. Do you have a tax advisor you could recommend to us?


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## Randy&Kathy (Feb 11, 2019)

If it is your first year in Spain you have to reside in the country for 183 days (does not need to be continuous) to establish tax residency. Then there are rules about what income is taxed where, such as social security paid to a US recipient residing in Spain is taxed by the US. Income earned in Spain is taxed by Spain. Most of the basis for which authority collects the tax from what source are pretty clear.


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## Tortuga Torta (Jan 23, 2016)

Elyles said:


> For those Americans who have asked about the Tax treaty between the US and Spain. Go to the IRS website and download form #8802 and the 15 pages of instructions with it or just google form 8802. It certifies Tax Residency country. *Apparently with this form, an American does not pay income taxes in Spain on worldly income. *One only need to state that they have the form. If ever asked for it, one will need to produce it. Our accountant here and my wife recently discovered this. This will not apply to any income in Spain which of course will require payment of appropriate income taxes. It is great news for those of us who are retired Americans with US investments. As appropriately so, a resident of Spain is required to pay real estate taxes.


Sorry, but I don't think this is true for year-round residents of Spain (as opposed to those who spend, say, three months in Spain every year). Form 8802's title is "Application for *United States Residency* Certification". Line 2 on the form is where you have to put your address for the year in which you are requesting U.S. residency certification. If you put your address is Spain (i.e. the truth), how can the U.S. create a certification that you reside in the U.S.?

Further, if you reside in Spain 183 days, by that alone you are tax resident in Spain based on Spanish law and taxable on all worldwide income (although there may be an exception for U.S. social security benefits; that I'm unclear on).


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## Randy&Kathy (Feb 11, 2019)

You are still required to file taxes in both countries. Which country collects the tax and the rate is dependent on the source and amount of the income. Worldwide income is mostly taxed in the country you have legal residency in but it does not free you from taxes in the country you are a citizen of, it just mitigates your tax liability.


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## Elyles (Aug 30, 2012)

Randy&Kathy said:


> You are still required to file taxes in both countries. Which country collects the tax and the rate is dependent on the source and amount of the income. Worldwide income is mostly taxed in the country you have legal residency in but it does not free you from taxes in the country you are a citizen of, it just mitigates your tax liability.




We were informed by Hacienda that unless we had income in Spain that we did not need to file here. This is all based on our tax situation and the Treaty. We pay taxes yearly in the US.


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## Elyles (Aug 30, 2012)

Tortuga Torta said:


> Sorry, but I don't think this is true for year-round residents of Spain (as opposed to those who spend, say, three months in Spain every year). Form 8802's title is "Application for *United States Residency* Certification". Line 2 on the form is where you have to put your address for the year in which you are requesting U.S. residency certification. If you put your address is Spain (i.e. the truth), how can the U.S. create a certification that you reside in the U.S.?
> 
> Further, if you reside in Spain 183 days, by that alone you are tax resident in Spain based on Spanish law and taxable on all worldwide income (although there may be an exception for U.S. social security benefits; that I'm unclear on).




Again, tax residency and physical residency are two totally different concepts. We file annually with form 8802 after we pay our US taxes and put our Spanish address with no issues. We have done this for six years. Please read all the instructions that go with the form. They are very specific on how it works.


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## baldilocks (Mar 7, 2010)

I just cannot understand the justification for the US to collect taxes from you worldwide when you are not living there. If you are living in Spain, then it is Spain which is providing the services and infrastructure that you use in your everyday life so, logically, Spain should get your tax income not the US for tango-man to waste on a "wall". Just my opinion.


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## Randy&Kathy (Feb 11, 2019)

Elyles said:


> Again, tax residency and physical residency are two totally different concepts. We file annually with form 8802 after we pay our US taxes and put our Spanish address with no issues. We have done this for six years. Please read all the instructions that go with the form. They are very specific on how it works.
> 
> 
> Sent from my iPad using Tapatalk


Yes, that is the point I was trying to make. You still have to file in both countries, your tax obligations to each jurisdiction will vary depending on the source of the income. A guide to some of this can be found at https://www.expatica.com/es/finance/taxes/tax-system-471614/


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## Tortuga Torta (Jan 23, 2016)

baldilocks said:


> I just cannot understand the justification for the US to collect taxes from you worldwide when you are not living there. If you are living in Spain, then it is Spain which is providing the services and infrastructure that you use in your everyday life so, logically, Spain should get your tax income not the US for tango-man to waste on a "wall". Just my opinion.


In fairness to us here in the U.S., it's not _just _us that does this--it's also Eritrea! Our little citizenship-based taxation buddy.

My wife is Spanish and we got her U.S. citizenship, so now she gets to contend with this for the rest of her life. I don't know if we will actually ever become expats (well, she'd be a returnee) in Spain or not, but taxes are definitely a primary concern in that regard.

For _earned _income, it's not bad: You get about $100k/person exemption due to the foreign earned income exclusion. For retirees, yes, you might want up paying double taxation in some cases.


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## Elyles (Aug 30, 2012)

baldilocks said:


> I just cannot understand the justification for the US to collect taxes from you worldwide when you are not living there. If you are living in Spain, then it is Spain which is providing the services and infrastructure that you use in your everyday life so, logically, Spain should get your tax income not the US for tango-man to waste on a "wall". Just my opinion.


Look up IRS form 8802 on the net and read the instructions. It provides a tax exemption (certificate) to avoid paying Spanish taxes as per the tax treaty


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