Moving from India to Spain isn’t just about visas and real estate — it also changes your tax residency. Indian citizens living in Spain for more than 183 days per year become Spanish tax residents, with obligations that include declaring global income, reporting assets in India, and understanding how the India–Spain Double Tax Treaty applies.
This guide breaks down the essential tax rules for Indians in Spain and explains how Borderless Lawyers ensures you stay compliant.
🇪🇸 When Are Indian Citizens Tax Residents in Spain?
You become a Spanish tax resident if:
| Rule | Explanation |
|---|---|
| 183-day rule | You spend more than 183 days in Spain in a calendar year |
| Economic center of interest | Your main job, income, or business is based in Spain |
| Family residence | Your spouse and minor children live in Spain |
📌 If any of these apply, you must file annual Spanish tax returns and declare your global income.
💸 What Taxes Do Indian Residents in Spain Pay?
1️⃣ Income Tax (IRPF)
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Progressive rate: 19% to 47%
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Tax applies to:
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Salaries, business income, and pensions
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Rental income (India and abroad)
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Dividends, interest, and capital gains
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Even NRE/NRO account interest must be declared if you’re tax resident in Spain
✅ We help assess and report all income sources legally.
2️⃣ Wealth Tax (Impuesto sobre el Patrimonio)
Spain levies an annual tax on global assets if their net value exceeds €700,000 (excluding €300,000 for your main Spanish residence).
Taxable Indian assets include:
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Property
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Stocks and bonds
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Mutual funds
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Crypto
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Jewelry (if held as investment)
💡 Different Spanish regions offer exemptions and reduced rates. We’ll advise based on where you live.
3️⃣ Modelo 720 – Foreign Asset Reporting
Mandatory if any of the following exceed €50,000 (combined value):
| Category | Indian Examples |
|---|---|
| Bank accounts | NRE/NRO/FCNR, Indian savings accounts |
| Real estate | Property in India |
| Investments | Mutual funds, insurance, stocks, ULIPs |
Deadline: March 31 each year
❗ Even if no tax is due, failure to report may trigger investigations.
4️⃣ Capital Gains Tax (CGT)
Applies when you sell a Spanish or foreign asset (like Indian property or shares) and realize a profit.
| Profit Amount | Tax Rate |
|---|---|
| Up to €6,000 | 19% |
| €6,001–€50,000 | 21% |
| €50,001–€200,000 | 23% |
| Over €200,000 | 26% |
✅ You may apply the India–Spain tax treaty to reduce double tax exposure.
5️⃣ Property Tax (IBI)
If you buy property in Spain, expect to pay IBI annually to your local municipality.
Rate depends on location and property value.
🔁 India–Spain Double Taxation Avoidance Agreement (DTAA)
Spain and India have a tax treaty that:
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Prevents double taxation on income (including pensions, dividends, and capital gains)
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Lets you apply foreign tax credits in Spain
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Clarifies residency tie-breaker rules if you spend time in both countries
🧠 Example: If you sell property in India while tax resident in Spain, Spain may tax the gain, but you can credit Indian capital gains tax paid.
🧾 Changing Tax Residency from India to Spain
Here’s how Indian citizens can manage their transition:
| Step | Action |
|---|---|
| 1️⃣ | Spend over 183 days/year in Spain |
| 2️⃣ | Inform the Indian Income Tax Department (if relevant) |
| 3️⃣ | Update Indian bank and investment KYC to reflect non-resident status |
| 4️⃣ | File Spanish tax return (Modelo 100) by June 30 |
| 5️⃣ | Declare Indian assets in Modelo 720 by March 31 |
✅ Borderless Lawyers helps coordinate tax status changes on both sides.
⚠️ Common Tax Mistakes Indian Citizens Make in Spain
| ❌ Mistake | 💥 Risk |
|---|---|
| Not filing Modelo 720 | Risk of audit and interest charges |
| Ignoring NRE/NRO account income | Still taxable in Spain |
| Believing NRI tax status in India protects you | Spain bases tax on residence, not Indian status |
| Failing to report Indian rental income | Global income must be declared |
| Assuming Spain won’t notice foreign assets | Spanish tax authorities share data with India via CRS |
👩⚖️ How Borderless Lawyers Helps Indian Clients
✔️ Confirm your tax residency status in Spain
✔️ Guide your Modelo 720 reporting
✔️ Handle income tax returns (Spanish + Indian coordination)
✔️ Advise on sale of Indian property while in Spain
✔️ Assist in restructuring assets for tax efficiency
✔️ Coordinate with Indian CA or financial advisor
✅ Full legal and tax compliance, tailored for cross-border Indian–Spanish situations.
📞 Call to Action
Don’t risk penalties or overpaying tax as an Indian resident in Spain.
Let our lawyers guide your compliance, protect your assets, and plan ahead.