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The rise of remote working has enabled many professionals to perform their duties from anywhere in the world. However, one of the key issues digital nomads need to consider is taxation. In this article, we explore how the Spanish tax system affects international remote workers.
Tax Residency in Spain
One of the first aspects to determine is whether you are a tax resident in Spain. According to the Spanish Tax Agency, a person is considered to be a tax resident in Spain if:
1. Stays in Spain for more than 183 days during the calendar year.
2. He/she has the main core of his/her activity or economic interests in Spain.
3. Their spouse and minor children habitually reside in Spain.
If you meet any of these conditions, you will be subject to taxation as a tax resident in Spain.
Taxes for Digital Nomads
1. Personal Income Tax (IRPF)
Tax residents in Spain must pay personal income tax on their worldwide income. The rates vary according to the autonomous community, but the state rates range from 19% to 47%.
On the other hand, non-residents are taxed only on income obtained in Spain through the Non-Resident Income Tax (IRNR), generally at a flat rate of 24% (or 19% if resident in the EU or EEA).
2. Value Added Tax (VAT)
If you supply services to customers in the EU, the reverse charge system may apply, which means that your customers are responsible for paying VAT. However, if you invoice private customers in Spain, you will have to charge VAT (currently 21%).
3. Social Security contributions
Self-employed digital nomads must register with the Special Regime for Self-Employed Workers (RETA) and pay a monthly contribution starting from 230 euros in 2024, depending on the declared income.
Tax Benefits and the ‘Digital Nomad Visa’.
From 2023, Spain offers a visa for digital nomads, allowing them to work remotely for foreign companies and be taxed under a special tax regime similar to the ‘Beckham Law’. Under this regime, beneficiaries can be taxed only on income earned in Spain at a flat rate of 24% up to 600,000 euros per year.
Do you have doubts about your tax situation? Contact us and we will advise you.
