Taxes that apply when bringing money from abroad

Bringing money into Spain from abroad can trigger tax obligations—especially if the source of the funds isn’t clearly documented.

Whether it’s from work, savings, or investments, it’s important to understand which taxes apply and how to report them properly to avoid penalties.

💸 What Happens If You Transfer Money to Spain After Working Abroad?

Imagine you’ve been working abroad for a while and, after returning to Spain, you decide to transfer or deposit part of your earnings into your Spanish bank account.

Sounds simple, right? Well, Hacienda (the Spanish Tax Agency) is very attentive when it comes to unusual financial movements—especially when it involves international transfers, large deposits, or unexplained income.

🏦 Spanish banks are required to report certain transactions to the Tax Agency.

If your bank notices a suspicious or unusually large transaction, they can inform Hacienda, which may then:

• Request an income tax declaration
• Ask for proof of origin of funds
• Issue a penalty or fine if they believe the explanation isn’t convincing

That’s why it’s essential to declare any income correctly—especially when it comes from abroad.

How could I avoid being admonished?

If you bring cash from abroad, and you do not make a corresponding notification to the Treasury, you can be charged from 10,000 €. This number as a minimum being so even with activities worth € 100,000.
For this reason, before sending currency, the S1 form of the Tax Office (AEAT) must be completed.

What is the S1 form?

The S1 form is a declaration required when:

• Depositing €100,000 or more into Spain
• Transporting €10,000 or more in cash (or equivalent in foreign currency) across Spanish borders

This form must be submitted before the movement or deposit of funds, and includes the following details:

• Country of origin and destination of the funds
• Exact amount and type of currency
• Method of transport (by air, land, sea, etc.)
• Source of the funds (e.g. salary, inheritance, sale of property)
• Purpose of the transfer

Once submitted and accepted by the Tax Agency, you’re authorized to move the money. The form must then be present during the entire transport process and shown at customs if requested.

⚠️ Important: The S1 declaration is only valid for the specific transfer indicated, and must be carried alongside the funds during transit.

Can I Be Exempt from Filing Taxes in Spain?

In general, transporting money or working abroad does not automatically exempt you from filing taxes in Spain. However, there are specific cases where exemptions or tax reliefs may apply.

🧳 Who Is Exempt from Declaring Cash Transfers?

Only individuals who professionally transport funds—and are registered and authorized by Spain’s Ministry of the Interior—are exempt from filing declarations for cash movement.

⚠️ Moving large sums without prior declaration may not trigger additional taxes, but it can result in heavy penalties from the Spanish Tax Agency (AEAT) if not properly justified or declared.

Can I Get a Tax Exemption for Working Abroad?

Yes, if you are a Spanish tax resident working abroad, you may be eligible for an IRPF exemption (not the same as being exempt from filing). This reduces your tax burden significantly—if certain conditions are met:

1. Your employer must not be based in Spain
2. You must work at a fixed location abroad (a permanent establishment like a branch, office, factory, or warehouse)
3. The country where you work must have a tax system similar to Spain’s IRPF (i.e. not a tax haven)

If these apply, you can exempt up to €60,100 per year from your taxable income in Spain.

The «Excess Regime» or Commuting Bonus

An alternative to Article 7p is the Excess Regime, which allows you to exempt the additional salary received for working abroad—but not the base salary.

This regime is ideal if your employer sends you abroad and offers extra compensation for the assignment. However, you must choose between Article 7p and the Excess Regime—they cannot be combined.

⚖️ Not sure which exemption applies to your case? Understanding your options can lead to major tax savings.

What Happens If You Don’t Declare the Transfer?

Failing to declare the transfer of funds to Spain—whether from abroad or within the country—can lead to serious penalties:

• Minimum fine: approx. €600
• Maximum fine: up to 50% of the total amount transferred
• You may also receive official warnings (public or private)
• And in some cases, the funds can be withheld or seized

🛑 Always notify the Tax Agency properly before making large transfers. It’s not just about taxes—it’s about compliance.

What if you have or receive a pension or income from abroad?

In today’s world, it’s increasingly common to have foreign bank accounts, pensions, properties, or income. Whether you’ve worked abroad or inherited assets, Spain’s Ministry of Finance (Hacienda) requires you to declare certain types of foreign wealth.

📝 When Must You Declare Assets Abroad?

You’re required to report foreign holdings if any of the following apply:

1. Your total assets abroad exceed €50,000
2. You hold securities, rights, deposits, insurance, or income from abroad
3. You own real estate abroad or hold rights over property located outside Spain

To do so, you must file Form 720 with the Spanish Tax Agency (AEAT).

💼 Foreign Pensions Must Be Declared

If you’re a tax resident in Spain and receive a pension from another country, you must also declare it—even if the pension was already taxed abroad. Whether it’s public or private, it counts as income and must be reported in your IRPF tax return.

💡 Not sure if your income qualifies? Better to be safe—failing to notify Hacienda can be extremely costly.

What If You Don’t File Form 720?

The consequences of not declaring are severe—much higher than failing to report cash transfers:

• Not declaring a foreign property: Minimum fine of €10,000
• If combined with foreign income or assets over €50,000: Fines can start at €30,000
• The penalty is €10,000 per undeclared category

🧠 Example: If you have a foreign pension, a house abroad, and €60,000 in a foreign account—and fail to declare any of these—you could face fines starting at €30,000 or more.

Benefits in the case of the European Union

It’s increasingly common for people to live in one country and work in another, especially near border regions. In these cases, known as frontier or cross-border workers, specific international tax rules apply.

🇫🇷🇵🇹 Spain’s Agreements with France and Portugal

Spain has bilateral agreements with both France and Portugal. According to these:

• If you live in Spain and work in France or Portugal → you only declare in Spain
• If you live in France or Portugal and work in Spain → you only declare in your country of residence

EU Coordination of Social Security and Tax

One key benefit for workers within the European Union is the existence of coordinated social security rules. These rules:

• Prevent dual contributions
• Help define where taxes and contributions must be paid
• Simplify administrative processes between tax offices

So, if you’re a Spanish resident working in another EU country, this EU framework will apply, making interactions with the Spanish Tax Agency much more straightforward.

What If You Work in the UK?

Since Brexit, the United Kingdom is no longer part of the EU, which means:

• EU coordination rules no longer apply
• Spain and the UK now rely solely on their bilateral tax treaty

This treaty still allows for:

• Avoiding double taxation through deductions
• Determining where tax obligations lie, depending on residency and income source

However, the process may be more complex than within the EU, and social security coordination is more limited. If you’re a Spanish resident working in the UK (or vice versa), it’s essential to review your tax obligations carefully and declare your income accordingly.

🧠 In all cases, keeping accurate records and understanding the rules of both countries is key to avoiding fines or paying taxes twice.

Better ask TaxDown

Bringing money from abroad into Spain can get complicated—but TaxDown makes it simple. We guide you through every step, ensuring your transfers are fully legal and stress-free.

From filing forms like the S1 to avoiding fines, our team offers expert, personalized support so you can enjoy your funds in Spain with total peace of mind.

File your income tax return with TaxDown and forget the hassle. We guide you step by step, apply every deduction you’re entitled to, and help you pay only what’s fair. Start for free at here.