Does having a NIE Number in Spain mean I have to pay tax in Spain?

The simple answer to this question is: NO. Although a NIE Number is refered to as a tax reference number sometimes, applying/having a NIE Number does not automatically mean you should or have to pay tax in Spain.

If you need a NIE Number click here to visit our home page

Tax in spain can be a complicated issue because if you fail to make a declaration or don’t pay the correct amount you can end up with a severe fine. The Spanish government frequently change their tax regulations, which makes if very difficult for both residents and non residents to keep up to date.

The key points when thinking about tax matters in spain are:

  • The Spanish tax year runs from January to December.
  • In spain both residents and non residents are required to pay tax.

Every non resident must make their annual non-resident tax declaration by December 31st.

Am I a tax resident in Spain now I have my NIE Number?

You are a resident for tax purposes in Spain if:

1.) You spend more than 183 days in Spain in any calendar year , regardless of it you are registered or have a NIE Number.

2.) You are self employed or otherwise employed in spain

3.) Your spouse or children live in spain and you are not legally separated even though you may spend less than 183 days in Spain.

This is a basic guideline and MY NIE recommend seeking professional tax advice.

Spanish tax residents are liable to pay income tax on tier world wide income, which is split into two category’s.

1.) Income from general activities- This includes incomes from employment, pension, and rental income

2.) Income from savings- This includes interest from savings, Dividend payments, income from life insurance policies, and gains made from the disposal and sale of assets.

Tax allowances with and without a NIE Number

Tax allowances- As a resident you will receive your personal allowance for your Spanish income tax. (from both savings and general income). These allowances include age allowance, married couple allowance and disabled allowance.

Since 2013, If you are a tax resident in spain and own assets in access of 50,000 euros outside spain, you are required to declare these assets under Spanish law.

An example of this assets include:

  • Assets held in any bank account
  • property
  • Shares
  • life insurance policys

Non Residence with a NIE Number Tax

If you own a property in Spain you must pay two taxes:

  1. IBI or council Tax-This is a council tax based on the rateable value of your property
  2. National income tax or rental income tax. income tax is paid by non residents who own a property heater rented out or not.

NOTE: The Spanish tax office does not send notifications on IBI tax addresses outside of Spain. It is therefore advisable for a non resident who has a property in Spain to appoint a fiscal representative. Click here to read more about the tax authorities in Spain.

Points to keep in mind

  1. You will not necessarily be reminded that you owe tax in spain.
  2. It is your responsibility to make sure all your taxes are paid.
  3. Any overdue taxes must be settled before you sell or inherit a property
  4. Failure to pay taxes on time can result in late payment interests and sanctions.

Need a Spanish accountant? MY NIE recomends www.spainaccountants.com

Internal links

How to get a NIE Number in Malaga

How to get a NIE Number in Benidorm

Download NIE Number forms

Is a ETIAS the same as A NIE number?

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