As an expat there are different ways to pay taxes in Spain, but now we are going to talk about what we call “residencia fiscal”, which in a few words, means that expats pay the same taxes as a local citizen.
There are 3 conditions for it, it does not mean that it is mandatory to comply all of them, one is enough:
- If you reside more than 183 days in Spain. There is no need for them to be consecutive.
- Your professional activity is in Spain, no matter if it is as an employer or working for somebody.
- Your partner and/or sons live in Spain.
What we are going to do is to talk a little about the best ways to save money (as the Spanish tax system is well known for its high cost) and, also, how it can benefit the expat reducing taxes.
The main thing to talk about is a Saving or an Investment Plan. Historically peopled used to fully rely on the public pension system in the country, but that is becoming a less reliable option as the years pass by, so start saving as soon as possible! And at the same time, the customer may have benefits tax wise.
Specially right at this moment, since the Spanish government has changed the entire saving and investing plans conditions, it is the perfect moment to look at those expats who already have a plan, no matter if it is a particular or an employee, or if it is the owner of a business, because now, businesses and their employees must do it together.
Nevertheless, right now, the focus should be on those who have a business and already have a saving or investing plan, because all the tax benefits they had so far must be almost completely lost. However, there is not only bad news but still other ways to achieve tax benefits from it, it is only that those plans must be checked and modified. In that case, there is no need to say that from ABR we can give full advise and solutions for anyone who needs it; and it is for free!
The other way is a life insurance. The tax benefits may be not as direct as a saving plan, and we really hope you never use it, but heritages in Spain are also processes full of high taxes, which can be reduced with a life insurance, and of course, a proper advisement focused on properly making the insurances and plans that, in combination, can achieve the most advantages as possible for its owner. For that reason, the key is to know the current situation of the customers to achieve the goal of making it fit as much as possible to their current situation.
Nevertheless, that is something that does not work the same for everybody, so we can be helpful through our complementary Juridic Service through our collaborators, the law firm LexTime, and seeking for the personalized ways through insurances.