# Taxable Income



## Burriana Babs (Nov 22, 2007)

Does anyone know if social security paid from the United States is taxable in Spain?


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## SunnySpain (Jul 30, 2008)

Burriana Babs said:


> Does anyone know if social security paid from the United States is taxable in Spain?


I am told that if you reside in Spain, then your worldwide income is taxable in Spain.


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## Burriana Babs (Nov 22, 2007)

Yes I understand that, but in the USA social security is non taxable unless other income reaches 30,000 or more and then only 1/2 of the social security payment amount is taxable. My question was is social security paid from the USA taxable at any rate in Spain? Is Spanish social security taxable?


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## Bevdeforges (Nov 16, 2007)

Burriana Babs said:


> Yes I understand that, but in the USA social security is non taxable unless other income reaches 30,000 or more and then only 1/2 of the social security payment amount is taxable. My question was is social security paid from the USA taxable at any rate in Spain? Is Spanish social security taxable?


It depends on the tax and social security treaties with Spain (which I'm not familiar with). But, in "many" European countries, US social security is taxable just like any other government pension - although there should be some sort of credit or allowance for whatever tax you pay to the US on your SS income on your Spanish taxes.

For US tax purposes, your social security may be 85% taxable if you are married to a non-resident alien and therefore file as married filing separately.
Cheers,
Bev


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## Stravinsky (Aug 12, 2007)

Burriana Babs said:


> Yes I understand that, but in the USA social security is non taxable unless other income reaches 30,000 or more and then only 1/2 of the social security payment amount is taxable. My question was is social security paid from the USA taxable at any rate in Spain? Is Spanish social security taxable?


But you're not in the USA, you are in Spain 

For instance the lump sum of a pension is _not_ taxable in the UK, but if you receive that lump sum and you are resident in Spain then it _is_ taxable.

I suspect that Spanish SS is under the taxable allowance limit. Yours may be as well, although maybe you are receiving some other form of income that makes it exceed it


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## chris(madrid) (Mar 23, 2008)

Oh yes we'll take money from everywhere - we're not choosy. 

iirc my accountant (who is my wifes´cousins´wife) told me ALL foreign income is taxable - UNLESS there is a tax treaty in force and you can show TAX paid in the country involved IN WHICH CASE Tax already deducted is discounted from your Spanish tax bill. 

ALSO if you can PROVE (for example) the CAPITAL was yours PRIOR to relocating - The Transfer of FUNDS is normally exempted of INCOME tax - it was (is no longer) subject to Patrimonial tax.


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## Burriana Babs (Nov 22, 2007)

Guess I will contact my gestoria as this is all to complicating for me.


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## Bevdeforges (Nov 16, 2007)

Burriana Babs said:


> Guess I will contact my gestoria as this is all to complicating for me.


The short answer is "yes" - your US social security is taxable in both Spain and the US. But, subject to treaty provisions, you should be able to avoid double taxation.

Chances are your gestoria will have no clue about the tax status of US social security on your US tax returns. But the usual route is that the US takes its cut first, then you get a credit or something from the country where you're resident (i.e. Spain).
Cheers,
Bev


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## Burriana Babs (Nov 22, 2007)

Bevdeforges said:


> The short answer is "yes" - your US social security is taxable in both Spain and the US. But, subject to treaty provisions, you should be able to avoid double taxation.
> 
> Chances are your gestoria will have no clue about the tax status of US social security on your US tax returns. But the usual route is that the US takes its cut first, then you get a credit or something from the country where you're resident (i.e. Spain).
> Cheers,
> Bev


US social security is only taxable (one half of it) if other income exceeds 30,000 approx. That is why I am confused if I have to pay taxes on it in Spain. I have read the treaty and still can not tell.


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## Bevdeforges (Nov 16, 2007)

If you are lucky enough to fall into one of the categories where your social security isn't taxed in the US, chances are it is taxed in Spain. (Not being familiar with Spain's tax laws I can't say for sure.) But usually there is some "break" on the taxation of government pensions - they usually aren't taxed quite the same way that earned income would be.
Cheers,
Bev


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## SunnySpain (Jul 30, 2008)

Burriana Babs said:


> US social security is only taxable (one half of it) if other income exceeds 30,000 approx. That is why I am confused if I have to pay taxes on it in Spain. I have read the treaty and still can not tell.


All your income worldwide is taxable where you reside, thus it is taxable in Spain, as its classed as income. However, how much you are taxed depends on your total income and how much over and above the "Spanish" allowance - it is.

To clarify - it mattes not if its taxable or half taxable in the US, it only matter if its taxable here in Spain, which it obviously is, as its a source of income - lol


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## jojo (Sep 20, 2007)

SunnySpain said:


> All your income worldwide is taxable where you reside, thus it is taxable in Spain, as its classed as income. However, how much you are taxed depends on your total income and how much over and above the "Spanish" allowance - it is.
> 
> To clarify - it mattes not if its taxable or half taxable in the US, it only matter if its taxable here in Spain, which it obviously is, as its a source of income - lol



Does that mean my house keeping money is taxable?? Cos its income that my OH puts it into my Spanish bank account from his UK account once a month

Jo


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## Burriana Babs (Nov 22, 2007)

I would not think so as that is your hubby doing what he is ment to do taking care of his family. It is his income not yours to begin with correct?


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## chris(madrid) (Mar 23, 2008)

jojo said:


> Does that mean my house keeping money is taxable?? Cos its income that my OH puts it into my Spanish bank account from his UK account once a month Jo


Jo it depends on the TRANSFER "reason" - if it comes as FAMILY ASSISTANCE (Asistencia familiar) it should not get hit - BUT there are limits as to how much and HOW OFTEN you can receive assistance. 

If it is perceived as a "regular payment" it's potentially taxable. The BANK is obliged to report single payments over 3000Euros and regular "large" payments to Hacienda BY LAW. ASK THE BANK (if you feel comfortable) or an IFA. 

If the UK account is ALSO in your name it's a simple capital transfer, thus NOT income - BUT make sure then The UK account is included in tax returns as THEY DO KNOW ABOUT THE ACCOUNT. And yes - that account will be looked at for INCOME too.


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