Whether you’re moving to Spain from Germany for retirement, work, or property investment, understanding Spanish tax residency and obligations is crucial. As a German citizen, you benefit from EU rights, but once you’re a resident in Spain, you may be taxed on your worldwide income and assets.
In this article, we explain when German citizens become Spanish tax residents, how taxes on income, property, and pensions work, and how Borderless Lawyers helps you stay compliant — and protected.
📍 When Are German Citizens Tax Residents in Spain?
You become a Spanish tax resident if any of the following apply:
| ✅ Condition | 💬 What It Means |
|---|---|
| You spend over 183 days in Spain per year | Most common trigger |
| Your main economic interests are in Spain | Job, business, or primary income source |
| Your spouse and children live in Spain | Presumption of residency unless proven otherwise |
📌 Spain’s tax year is January 1 to December 31.
Once you’re tax resident, Spain taxes you on worldwide income and assets.
💸 What Taxes Do German Citizens Pay in Spain?
1️⃣ Income Tax (IRPF)
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Progressive rates: 19% to 47%
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Applies to:
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Salaries
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Freelance or business income
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Rental income (in Spain or abroad)
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Pensions and investment income
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💡 We assist Germans with Spanish tax filings, including declaring German pensions and rental income.
2️⃣ Wealth Tax (Impuesto sobre el Patrimonio)
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Applies if your net wealth exceeds €700,000 (excludes primary home up to €300,000)
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Rates: 0.2% to 2.5%, depending on region and amount
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Assets include:
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German property
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Bank accounts
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Investments and pensions
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Crypto assets
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📌 Wealth tax is regional — we check if you qualify for deductions or exemptions.
3️⃣ Real Estate Taxes
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IBI (Impuesto sobre Bienes Inmuebles): Annual local tax on Spanish property
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Capital Gains Tax: 19–26% on profit from selling Spanish property
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Rental Tax: Rental income must be declared and taxed in Spain
🧾 Modelo 720 – Foreign Asset Declaration
If you are a Spanish tax resident and hold more than €50,000 in any of the following categories outside Spain, you must file Modelo 720:
| 💼 Asset Type | 📌 Examples |
|---|---|
| Bank accounts | German current or savings accounts |
| Real estate | Property in Germany or elsewhere |
| Securities/investments | Shares, mutual funds, pensions (including Riester, Rürup, etc.) |
📆 Filing deadline: March 31 each year
❗ Non-compliance used to trigger large fines. Now reduced, but still carries audit risk.
🔁 Spain–Germany Double Taxation Agreement
You do not need to pay taxes twice on the same income. Spain and Germany have a double tax treaty that:
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Prevents dual taxation
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Allows tax credits for tax already paid in Germany
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Applies to pensions, dividends, rental income, and capital gains
✅ We coordinate with German accountants to ensure your global tax filings are aligned.
🧳 Changing Tax Residency from Germany to Spain
When relocating permanently, consider:
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Notifying the German Finanzamt of your exit
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Planning for exit tax on certain assets (if significant wealth)
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Understanding pension rules — public vs. private
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Losing access to German tax advantages (e.g., Riester deductions)
✅ We help clients legally shift tax residency with full documentation and planning.
⚠️ Common Tax Mistakes by Germans in Spain
| ❌ Mistake | 💥 Risk |
|---|---|
| Thinking EU residency = no tax duties | Wrong — Spain still taxes you if resident |
| Not declaring German income or assets | May lead to audits or fines |
| Missing Modelo 720 deadline | Can trigger long-term compliance issues |
| Assuming German pension is only taxed in Germany | Often not true — Spain usually taxes it |
| Not planning inheritance tax | Spain has different rules than Germany |
🧠 Inheritance and Gift Tax for Germans in Spain
Spain taxes gifts and inheritances, even from abroad, if the beneficiary is tax resident in Spain.
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Regional reductions apply (e.g., in Madrid or Andalusia)
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Children and spouses often get favorable rates
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Germans may also face inheritance obligations in Germany
✅ We offer cross-border inheritance planning to reduce tax impact.
👩⚖️ How Borderless Lawyers Helps German Citizens in Spain
✔️ Determine your Spanish tax residency status
✔️ File income, wealth, and Modelo 720 declarations
✔️ Coordinate filings with German advisors
✔️ Review pension, rental, and investment taxation
✔️ Advise on inheritance tax and estate planning
✔️ Support you in German, English, or Spanish
✅ We protect your wealth — and your legal peace of mind.
📞 Call to Action
Living in Spain or planning to move from Germany?
Let our tax-savvy lawyers help you stay compliant across borders.