If you’ve ever wondered why so many foreigners choose the golden visa as their preferred method to obtain Spanish residency, the answer goes beyond its fast application process and simple requirements. One of the key factors that attract individuals to this visa is its significant tax advantages.
In this article, we will delve into the intricate details of the taxes associated with the golden visa in Spain. We will not only explore the taxes you’re required to pay but also unveil the complete list of tax benefits that this permit bestows upon you. By the end of this post, you’ll not only gain insights into the taxes you’ll encounter and their filing timelines but also comprehend why obtaining the golden visa is an immensely advantageous move from a tax perspective.
Tax Residency Status with the Golden Visa
Before we dive into the specific tax rates and the comprehensive list of tax advantages that the investor visa offers, it’s crucial to understand the tax residency status you acquire as the holder of this visa.
Being considered a tax resident is distinct from your immigration residency status. Any foreigner who spends more than 183 days per year in Spain is deemed a tax resident. However, this rule doesn’t apply to the golden visa.
While other residency permits necessitate a minimum stay of 183 days in the country for renewal, the golden visa breaks this pattern. It’s the only permit that doesn’t mandate a minimum stay duration for renewal. All you need to do is maintain your investment in Spain and visit the country at least once a year.
This uniqueness contributes to the attractiveness of the golden visa. Its simple requirements and swift application process, combined with the exemption from resident taxes, make it an appealing choice.
Hence, when assessing the taxes applicable to golden visa holders, two scenarios emerge:
1. **Golden Visa Holders Spending Less Than 183 Days Per Year:** These individuals are considered non-residents for tax purposes.
2. **Golden Visa Holders Spending Over 6 Months:** These individuals are considered tax residents.
In the subsequent section, we will delve into these differences and their implications in greater detail.
Taxes in Spain with a Golden Visa
Let’s now explore the precise taxes and rates associated with the golden visa within Spanish territory. To begin, let’s differentiate based on your tax residency status.
Golden Visa Taxes for Residents
If you have obtained the investor permit and spend over 183 days per year in Spain, you qualify as a tax resident.
Firstly, this entails paying income tax on all worldwide income you generate. This includes income from both Spain and any other country. Income tax is assessed through a progressive rate ranging from 17% to 50%. The upper limit varies by region; some have it lower. Detailed information about income tax in Spain and potential deductions can be found here.
When do you pay this? Annually, you are required to file your income tax declaration from April to June.
But that’s not all.
In addition to income tax, there are two more taxes to consider:
1. **Capital Gains Tax:** If you make profits by selling assets (such as company shares), you’re subject to capital gains tax, ranging between 19% and 23%.
2. **Wealth Tax:** Ranging from 0.2% to 2.5%, this tax is applied to high-value assets. Important exemptions exist, varying by region. For instance, in Catalonia, amounts below €500,000 are exempt.
Tax Treaties and Avoiding Double Taxation
You might wonder: If I’ve already paid taxes in the country where I earned the income, do I pay taxes again in Spain? Thanks to double tax treaty conventions, you generally won’t. You’ll pay taxes once and receive deductions in Spain. However, this is a complex topic. For more information, consult a specialized tax lawyer or refer to this guide on double tax treaties.
Golden Visa Taxes for Non-Residents
If you hold a golden visa but don’t spend a minimum of 6 months per year in Spain, there’s good news. You’re classified as a non-resident for tax purposes, entitling you to significant tax advantages that can lead to substantial savings.
In this scenario, you’ll face two main taxes: non-resident income tax and wealth tax.
1. **Non-Resident Income Tax:** Instead of paying regular income tax, you’ll pay non-resident income tax. Thanks to double tax treaty conventions, you’ll likely only pay this tax concerning your property. Rates vary based on whether you rent the property or use it personally for visits.
2. **Wealth Tax:** If the property’s purchase price exceeded €700,000, you’ll be subject to wealth tax. Note that this €700,000 limit may vary by region. Rates range from 0.2% to 2.5%, and you can deduct any mortgage related to the final purchase.
Conclusion
Owning a golden visa in Spain brings forth numerous tax advantages. Nevertheless, navigating this intricate process and harnessing these advantages necessitates the expertise of a tax advisor. At Balcells Group, we meticulously analyze your situation to determine the exact taxes you’ll face in the country and how best to optimize them. Contact us today through the form below to dispel all your doubts and embark on your tax-efficient journey.
