Spanish resident tax returns declaring income worldwide received in the 2013 calendar year will be submitted during May and June 2014. A Spanish Income Tax return will be always required to be submitted in your first year of tax residency, regardless how low is your income. Remember that for a tax purpose you are considered as a resident if you stay in our country more than 183 days within a year period.
This tax is calculated on your worldwide income, including pensions from your home country, and interest incomes in bank accounts you may have abroad. Note that there are pensions that according to double taxation agreement between both countries can be taxed only in the home country and never in the country where you are fiscal resident. Such as government pensions paid to retired civil servants, police, British Army personnel, or medical and nursery staff from the NHS, will be taxed in the UK and not in Spain.
The declaration thresholds this year are as follows:
- For earned income: 22,000, however it will fall to 10,200 when earned from more than one employer or when the income is not tax at source, such as pensions received from your home country.
- Property Rental Incomes: 1,000
- Incomes on your bank savings or other investments: 1,600
However, remember that you will have to complete and submit a tax return on your first year of tax residency. It is interesting you bear also in mind the following:
- When selling your property you will have to provide at the Notary a fiscal resident certificate issued by the Tax Office. It is very advisable to appoint a fiscal representative who may apply and receive the certificate on your behalf. Submitting a tax return, regardless your are obligated or not to submit one, is the best way whatsoever to prove you are fiscal resident in Spain and therefore to get the certificate straightaway before completion. Otherwise, the buyer will have to retain 3% of the sales proceeds on account of your Capital Gain Tax liability.
- 65 years old Spanish fiscal residents are totally exempted on Capital Gain Tax when selling their main dwelling in Spain. But remember you must have lived in it the 3 previous years and will be required to prove it.
Personal allowances this year are as follows:
- Under 65 years old: 5.151
- 65 years and over: 6.069
- 75 years and over 7.191
Tax rate after allowances and deductions, for Murcia Region are as follows:
- Between 0 and 17,707.20 24,75%
- Between 17,707.20 and 33,007.20 30,00%
- Between 33,007.20 and 53,407.20 40%
- Between 53,407.20 and 120,000.20 47%
- Between 120,000.20 and 175,000.20 51%
- Between 175,000.20 and 300,000.20 54%
- More than 300,000.20 55%
For your incomes from your savings, different tax rates apply:
- For the first 6K Euros: 21%
- From 6K to 18K Euros: 25%
- From 24K Euros ahead: 27%
This will affect mainly to:
- Your capital gains made on the sale of your properties.
- Incomes on your bank savings or other investments
Remember that banks will make 21% tax retention on interests paid, and you will be able to claim some back by submitting a tax return.
At Corral&Alcaraz we will always be pleased to assess your personal situation and answer any questions you may have.
We wish to make your life easier in Spain.