3rd May 2020
In this article I answer 8 typical questions about the income tax return for those people who came to Spain for work and registered themselves in the Special Income Tax System for displaced workers ("Regimen especial de trabajadores desplazados", also known as "Beckham-Law"). Many expats use this special type of taxation.
[If you are a normal resident in Spain and not subject to this Special System, please read my article about the Spanish income tax for residents.]
All those sent to Spain from abroad by their employers, as well as workers who have moved to Spain to take up an employment here, and who have registered for the application of the special taxation under the so-called "Beckham-Law", must file an income tax return.
If you came to Spain after January 1st, 2015, form 151 applies. If you came before that date, you can also choose form 150, which takes into account the regulations then in force.
The "Beckham-Law" is a special scheme under the Spanish Income Tax Law, whereby the persons concerned, although residents in Spain, are taxed as if they were non-residents.
As the name implies, the income tax taxes all "income", i.e. any income that a person earns or otherwise receives in any way.
Persons who are taxed according to the special regulations for displaced workers must report the following income, but only if they have been obtained in Spain, i.e. from Spanish sources:
Important: income from employment is an exception of the rule of Spanish source:
The entire income from employment from all over the world is treated as if it had been obtained in Spain and is thus fully taxed. It is possible to deduct taxes paid abroad for that income to some extent.
Income from donations and inheritances are not taken into account in the income tax return, they do not have to be indicated. Those income have their own taxes. So if your received a donation, you have to pay donations tax (within 30 days after the donation). If you inherited something, you have to pay inheritance tax (within 6 months after the date of death).
Yes, who is included in the Special System for displaced workers has to file an income tax return every year. There is no exemption of the obligation to file depending on the amount of income received.
In Spain, there is usually the possibility to file a joint income tax return for members of a so-called "family unit" ("unidad familiar"). However, there is no such possibility when applying the special rules for displaced workers. The respective taxpayer is always assessed alone and personal circumstances are not taken into account.
There are two types of income in the case of displaced workers which are taxed at different rates:
Interest, dividends and capital gains are taxed with 19% for income of up to € 6,000, with 21% for up to € 50,000, and beyond with 23%.
Income from work, rental of Spanish real estate, etc. are taxed with 24% up to € 600,000, beyond that with 45% (other rates apply to those who came to Spain before 2015).
In the special income tax scheme for expats, the only two possible deductions are:
- deductions because of taxes paid abroad (for the income from work),
- deductions because of donations (in the same extent as residents).
Displaced workers have to file their income tax return regarding 2019 until the 30th of June of 2020.
If you want the Tax Office to directly debit the amount to pay from your bank account, it is mandatory to file the tax return until the 25th of June of 2020.
You can either fill in and file your tax return yourself or have it prepared and submitted by a tax advisor.
As a displaced worker, you can fill in and file your income tax return by yourself through the website of the Spanish Tax Office.
There is no so-called "borrador" (draft) in this case, but you have to declare your income and withheld tax on it by yourself, as well as possible deductions for donations or taxes already paid abroad.
Of course you can also have your income tax return prepared and filed by a tax consultant. This saves time and nerves and is especially recommendable for those who do not speak Spanish very well or have multiple income from different sources.
This article is intended to give an overview of the subject of the income tax return for individuals under the special regime applicable to workers relocated to Spain ("Regimen especial de trabajadores desplazados", so-called "Beckham-Law", Modelo 151). In no case can the article replace a personal consultation and analysis of the individual case.
The deadline for filing the income tax return for displaced workers regarding the calendar year 2019 is the 30th of June of 2020. However, if you want the payment to be debited, you must submit the declaration by 25th of June at the latest.
The income tax return for workers relocated to Spain is relatively straightforward, since the personal situation is not taken into account and there are hardly any deductions. Therefore, those who speak Spanish, will probably be able to do the tax return on their own.
If you do not speak Spanish very well or if it is your first income tax return in Spain, I would however recommend you to get it prepared and filed or at least checked by someone who is familiar with Spanish taxes.
You would like to make your tax declaration by yourself, but have questions about some points? Please feel free to arrange a consultation with me!
You do not have the time or just don´t want to prepare your tax return on your own, read endless instructions and be on hold at the Tax Office? No problem: Just let me prepare your income tax return!
I request all necessary information from you, answer your questions, prepare the tax return and submit it after your OK.
It is that easy.
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Rechts- und Steuerberatung für Ausländer und Expats in Spanien (Einkommen, Immobilien, Beckham-Regelung).
Legal and tax advice for foreigners and Expats in Spain (income, real estate, Beckham Law).
Asesoramiento legal y fiscal para extranjeros en España (renta, inmuebles, Ley Beckham).