The special tax regime allows applying a fixed tax rate of 24% on income up to €600,000 per year (47% on income exceeding €600,000) for all professional activities.
Passive income earned in Spain is taxed on a progressive scale from 19% to 28%. Incomes earned abroad are not taxed in Spain, except when they constitute income from employment.
There is no need to declare foreign assets (reporting under Form 720).
Luxury tax applies only to property located within Spain, according to the legislation of the region where the taxpayer resides.
The main drawback is the inability to apply double taxation avoidance agreements, which may result in a higher tax burden on income earned abroad. The second drawback is the inability to deduct expenses and tax benefits.
In the case of high salaries, the second drawback is not significant, as the expenses eligible for deduction and allowed by law are proportionally insignificant relative to income.
One year from the date of application and the subsequent five years.
Upon completion of the special tax regime, you transition to resident status and must fulfill all tax obligations associated with this status. This includes reporting foreign assets (Form 720), declaring income for income tax and paying taxes (Form 100), reporting luxury tax obligations if applicable (Model 714)."
Yes, that is also possible.
In the next article, we will explain how to request it, how to opt out of it, and why there is still no request form for digital nomads.
Within 6 months from the moment of registration with the social insurance authority.