If you’re a South African planning to live, retire, or invest in Spain, it’s crucial to understand how Spanish tax residency works, when you’re required to declare global income and assets, and how to avoid double taxation between Spain and South Africa.
This article breaks down everything South Africans need to know about Spanish taxes, the Modelo 720 declaration, and your legal obligations once you’re a resident.
✅ Borderless Lawyers offers expert legal and tax support to keep you 100% compliant.
📍 When Do South Africans Become Spanish Tax Residents?
You are considered a tax resident in Spain if any of the following apply:
| Rule | Explanation |
|---|---|
| 183-day rule | You spend more than 183 days per year in Spain |
| Center of economic interests | Your main business, job, or income is in Spain |
| Family tie rule | Your spouse or minor children live in Spain |
📌 Once you are tax resident in Spain, you are required to declare worldwide income and assets.
💸 What Taxes Do South African Residents in Spain Pay?
1️⃣ Income Tax (IRPF)
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Progressive rates: 19% to 47%
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Taxed on:
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Employment income
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Pensions (SA or other)
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Rental income
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Dividends and capital gains
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Business or freelance earnings
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💡 South African pensions are often taxable in Spain, even if taxed in South Africa.
2️⃣ Wealth Tax (Impuesto sobre el Patrimonio)
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Applies if net assets exceed €700,000 (excluding €300,000 on primary residence)
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Rates range from 0.2% to 2.5% depending on total value and region
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Includes:
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South African property
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Investment portfolios
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Bank accounts (global)
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Crypto assets
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✅ We help you understand thresholds and exemptions.
3️⃣ Modelo 720 – Foreign Asset Declaration
Spanish tax residents must declare foreign assets over €50,000 in:
| Category | Examples |
|---|---|
| Bank accounts | SA savings, check, or investment accounts |
| Real estate | Properties in South Africa or abroad |
| Securities | Retirement funds, shares, life insurance |
📆 Deadline: March 31 annually
❗ Failure to declare used to incur harsh penalties. While the EU limited those fines, non-compliance still triggers audits.
4️⃣ Real Estate Tax (IBI)
Applies annually if you own property in Spain.
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Paid to local municipality
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Varies by location and property value
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Not deductible against South African tax, but must be reported
5️⃣ Capital Gains Tax
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Applies when you sell Spanish property or shares for profit
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Rates:
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19% (up to €6,000)
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21% (€6,001–€50,000)
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23% (€50,001–€200,000)
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26% (€200,001+)
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No exemption just because you’re not an EU citizen
✅ Borderless Lawyers helps South Africans structure sales tax-efficiently.
🔁 Spain–South Africa Double Taxation Agreement
Spain and South Africa have a tax treaty to avoid double taxation. It ensures:
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Income isn’t taxed twice in both countries
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Pensions, rentals, and investments are taxed based on residency
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You can apply for tax credits in Spain for taxes already paid in South Africa
💡 Still, you must declare foreign income in Spain if you’re resident — even if tax was paid abroad.
🧾 Changing Residency from South Africa to Spain
To move your tax residency:
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Spend more than 183 days in Spain
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Deregister from SARS (if applicable)
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Update your country of residence with banks and institutions
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Be prepared to file taxes in Spain on global income
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Plan for possible exit tax in South Africa on certain asset types
✅ We work with trusted tax advisors in both Spain and South Africa.
⚠️ Common Tax Mistakes by South Africans in Spain
| ❌ Mistake | 💥 Risk |
|---|---|
| Not declaring South African income | Can lead to audits or penalties |
| Ignoring Modelo 720 | Triggers long-term compliance issues |
| Overlooking pension taxation | Spain may tax your SA retirement income |
| Not coordinating with SARS | Can cause double tax or residency conflicts |
| Believing tourist stay avoids tax | Spain looks at actual days and ties |
👩⚖️ How Borderless Lawyers Helps You Stay Compliant
✔️ Assess your Spanish tax residency status
✔️ File Modelo 720 & annual tax returns
✔️ Coordinate with South African tax advisors
✔️ Advise on pension, rental, and global income
✔️ Provide tax planning before and after arrival
✔️ Assist with inheritance & gift tax in cross-border estates
✅ Our goal is to legally minimize your exposure and avoid fines.
📞 Call to Action
Moving from South Africa to Spain?
Let our international tax and residency lawyers help you legally optimize your move — with full cross-border compliance.