Moving to Spain from the U.S. comes with life-changing benefits — but also important tax responsibilities. As an American, you’ll face dual reporting, potential wealth tax, and must comply with both Spanish and U.S. laws.
This guide explains what U.S. citizens need to know about tax residency in Spain, how to avoid double taxation, and when to get legal help.
📍 When Are You a Tax Resident in Spain?
You are considered a tax resident in Spain if:
✅ You spend more than 183 days in a calendar year in Spain
✅ OR your main economic interests or center of vital interests are based in Spain
🔹 Once tax resident, you must declare your worldwide income to Spanish authorities.
💼 Double Taxation: USA & Spain
Spain and the U.S. have a Double Taxation Agreement, which helps avoid being taxed twice on the same income.
Key points:
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Spanish residents can credit taxes paid in the U.S.
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You’ll still need to file with the IRS — even as a Spain resident
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File IRS Form 1116 (Foreign Tax Credit) or 2555 (Foreign Earned Income Exclusion)
📄 Required Tax Forms for U.S. Expats in Spain
| Form | Purpose |
|---|---|
| IRS Form 1040 | U.S. federal income tax return |
| IRS Form 8938 | FATCA – reporting foreign assets |
| FBAR (FinCEN 114) | Bank accounts over $10,000 |
| Modelo 720 (Spain) | Declare foreign assets over €50,000 |
| Modelo 100 | Spanish personal income tax return |
| Modelo 714 | Spanish wealth tax (if applicable) |
💡 Filing errors can lead to huge penalties in both countries — get professional advice.
💰 Spanish Income Tax for U.S. Citizens
| Taxable Income (Annual) | Tax Rate (%) |
|---|---|
| €0 – €12,450 | 19% |
| €12,450 – €20,200 | 24% |
| €20,200 – €35,200 | 30% |
| €35,200 – €60,000 | 37% |
| Over €60,000 | 45% |
🧾 Add regional variations depending on autonomous community (Madrid, Catalonia, etc.)
💸 Wealth Tax (Impuesto sobre el Patrimonio)
Applies to individuals with net assets above €700,000, excluding your primary residence (up to €300,000).
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U.S. citizens with global assets must assess their net wealth
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Many expats use corporate or trust structures to optimize legally
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Applies annually if you’re tax resident
🏠 Property Tax Obligations
If you buy property in Spain, you’ll pay:
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IBI (annual local property tax)
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Basura (waste collection fee)
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Non-resident income tax if renting or not using the property as a resident
⚠️ U.S. FATCA Compliance
The Foreign Account Tax Compliance Act (FATCA) obligates foreign banks to report accounts held by U.S. citizens.
🔸 If you open a Spanish bank account, your info is shared with the IRS
🔸 Ensure all Spanish accounts are reported on your FBAR and 8938 forms
👨⚖️ How Borderless Lawyers Can Help
Our U.S.-focused legal team helps:
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Determine tax residency and create a plan
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Coordinate with Spanish + U.S. tax advisors
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File Spanish tax returns and Modelo 720
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Assist with NIE, empadronamiento, and legal documents
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Structure property purchases and assets to minimize tax exposure
✅ We speak English, understand IRS compliance, and represent Americans throughout Spain.
📞 Call to Action
Worried about Spanish taxes or residency status?
Let us help you navigate dual obligations with confidence.