The income tax return for foreigners, residents working abroad and foreign income

The tax obligations of Spanish citizens abroad must be determined according to their tax residence. There are no general rules for the entire European Union that indicate how the income of persons who reside, work or are outside their country of origin must be reported or recorded; however, we will try to clarify some general doubts.

What does it mean to be a tax resident in Spain?

To determine if you’re a tax resident in Spain, at least one of the following conditions must apply:

1. You spend more than 183 days per year in Spain.
   Occasional absences count toward this total unless you can prove tax residency in another country, typically with an official tax residency certificate.
2. Your main economic interests are in Spain.
   This includes direct or indirect business or professional activities based in the country.
3. Your spouse or dependent minor children live in Spain.

📝 If you meet any of these criteria, you’re required to file your tax return in Spain as a resident.

Even if you claim to have moved abroad, if that country is considered a tax haven, Spain may still treat you as a tax resident under Law 35/2006, which governs Personal Income Tax, among others.

How to avoid double taxation of income?

If you work abroad and you have to file your income tax return in Spain, it is important to avoid double taxation, so you should check if the country where you work makes discounts on the salary earned and asks you to file the Spanish income tax return.

These agreements are understood as agreements signed between countries, it was agreed that each country would only receive what is declared in them and no other taxes would be paid for the same income, Spain has double taxation agreements with the following countries:

It is important to highlight that filing income tax in Spain when working abroad does not exempt you from paying other taxes in the country where you reside, in conclusion, if you receive any type of income from Spain, such as renting a house, it will have to be declared as a non-resident income tax.

How to File IRPF with Foreign Income

When filing your IRPF (Personal Income Tax) in Spain while earning income from abroad, you need to consider a few key points:

1. Check if a double taxation agreement exists between Spain and the country where you earn your income. This helps avoid paying taxes twice on the same earnings.
2. Article 7p exemption: If you’re a Spanish tax resident working abroad, you may be eligible for a tax exemption of up to €60,100 per year—but only if you meet certain conditions:
   • Your employer is not a Spanish resident company, or you work in one of its permanent establishments abroad.
   • The country where you work applies a tax similar to Spain’s IRPF.

👉🏻 Want to know how much you could save thanks to Article 7p? Try our calculator.

✅ If you meet these criteria, your foreign-earned income may be exempt from taxation in Spain.

If you don’t qualify for this exemption, you’ll still have to declare the income, but you might benefit from the Excess Regime or apply deductions to avoid double taxation.

How to File Your Tax Return from Abroad?

Are you living or working abroad and unsure how to handle your tax return in Spain? You’re not alone. This can be confusing, especially when you might be required to pay taxes in both countries.

Your tax obligations depend on your specific situation. Understanding your tax residency status, available exemptions, and international tax agreements is essential to filing your tax return correctly and avoiding double taxation.

How Do You Know If You’re a Tax Resident?

Before anything else, you need to determine whether you’re considered a tax resident in Spain. This is crucial, as it affects where and how you must pay taxes.

According to the Spanish Tax Agency (Agencia Tributaria), you’re a tax resident in Spain if:

• You spend more than 183 days per year in Spain.
• Your main economic interests or activities are located in Spain.
• Your spouse or dependent children live in Spain.

Even if you move to a tax haven, Spain may still consider you a tax resident during the year you change residence. Special rules also apply to diplomats and workers on international missions, who usually retain their Spanish tax status.

💡 If you don’t meet these criteria but earn income in Spain, you’ll be taxed as a non-resident under the Non-Resident Income Tax (IRNR). Non-residents only pay taxes on income sourced in Spain.

Income Exemption When Working Abroad

If you’re a Spanish tax resident but working abroad, good news: you may qualify for an income exemption of up to €60,100 per year on foreign-earned salary.

But here’s the catch—you must meet all of the following conditions:

1. The company you work for must not be based in Spain.
   If it is, your work must be carried out in a permanent establishment abroad (e.g. a branch office).
2. The country where you work must apply a tax similar to Spain’s IRPF (Personal Income Tax).

✅ If you meet these criteria, your foreign salary (up to €60,100) can be exempt from Spanish taxation.

Alternative Option: The Excess Regime

There’s another method called the Excess Regime—but it’s not compatible with the €60,100 exemption.

This regime allows you to exclude from taxation the extra compensation (known as “plus de desplazamiento”) you receive for working abroad—essentially, anything you earn above your normal salary in Spain.

❗You must choose one regime or the other, not both. Carefully evaluate which one benefits you most.

What If You’re a Cross-Border Worker?

Cross-border workers live in one country and work in another—common in regions close to national borders.

Each case varies depending on the bilateral agreements between Spain and its neighboring countries:

• Morocco: Income may be taxed in both countries, since the agreement lacks a clear exemption.
• France & Portugal: If you live in Spain and cross daily for work, you’ll pay tax only in Spain.
  • If you live in France or Portugal and work in Spain, you’ll declare your income in your country of residence.

🔍 Always check the specific tax treaty between Spain and the country where you work or live. It can save you from unnecessary payments—or legal headaches.

FAQs

Got questions? We’ve got the answers (no jargon, promise).

Wrap it up stress-free: sort out your international taxes with ease

Filing an income tax return as a foreigner in Spain or as a Spanish resident abroad can be tricky. Understanding your tax residency, avoiding double taxation, and applying the right exemptions is key to staying compliant and not overpaying.

At TaxDown, we make it simple. We guide you through every step so you can meet your obligations without stress or surprises. Our team reviews your case and helps you claim every tax benefit you’re entitled to.

👉 Start for free at app.taxdown.es and forget about international tax headaches.