Spain

{"ftc_utility":"high","fbar_trigger_notes":"US expats in Spain are required by Spanish law to have local bank accounts for salary deposits and everyday transactions. Spanish bank accounts denominated in euros will trigger FBAR filing requirements once the aggregate balance across all foreign accounts exceeds USD 10,000 at any point during the calendar year. Additionally, Spain requires tax residents to file Modelo 720, reporting foreign assets above 50,000 EUR - this is separate from FBAR but creates parallel disclosure obligations. Failure to file Modelo 720 historically carried severe penalties, though the penalty regime was partially struck down by the EU Court of Justice in 2022 and has since been reformed.","ftc_utility_reason":"Spain has a worldwide taxation system for residents with progressive rates up to 47% on general income and up to 28% on savings income. These rates typically exceed US federal tax rates, making the Foreign Tax Credit highly valuable for US expats in Spain. The FTC allows US expats to use Spanish taxes paid to offset US tax liability dollar-for-dollar, typically eliminating US federal income tax liability. Many US expats in Spain choose the FTC over FEIE because Spanish taxes often exceed the FEIE benefit, and the FTC avoids the stacking problem that can result when FEIE exclusion pushes remaining income into higher US brackets.","presence_day_count_notes":"Spain's tax residency threshold is 183 days in a calendar year, which can complicate FEIE planning. A US citizen who spends more than 183 days in Spain becomes a Spanish tax resident and owes Spanish tax on worldwide income. The 330-day physical presence test for FEIE requires the taxpayer to be outside the US for 330 of any 12 consecutive months - this is achievable for US expats resident in Spain. Bona fide residence is generally straightforward once a Spanish residence permit is obtained. Spain does not impose exit restrictions on FEIE eligibility.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":18000,"local_tax_rate_on_earned_income":0.37,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Private pension income received by Spanish tax residents is taxed as general income on the progressive scale (19% to 47%). Spanish domestic pension plans (planes de pensiones) allow deductions on contributions up to 1,500 EUR per year (reduced from 8,000 EUR by reforms), with additional limits for employer contributions. Distributions from Spanish pension plans are fully taxable as earned income. Foreign pension income is taxed as general income subject to treaty provisions. The applicable rate depends on total taxable income and the autonomous community of residence, which adds a regional surcharge on top of the state rate.","tax_rate":null,"locally_taxed":true},"social_security":{"notes":"Under Article 20 of the US-Spain tax treaty, US Social Security benefits paid to a Spanish resident are taxable only in the United States. This is a source-country taxation provision. Spanish residents receiving US Social Security should not owe Spanish tax on those benefits, but must declare them. The treaty provision is intended to prevent Spain from taxing US Social Security income. Separate US-Spain Totalization Agreement governs social security contribution obligations.","locally_taxed":true,"treaty_protection":true},"roth_distributions":{"notes":"Spain does not recognize the tax-exempt status of Roth IRAs. Distributions from Roth IRAs may be treated as pension income by Spanish tax authorities and taxed under the general income scale. The US-Spain treaty does not specifically address Roth accounts. This creates a potential double-taxation risk on distributions since contributions were made from after-tax US dollars. US expats in Spain should seek specific advice on treaty positions for Roth distributions, as treaty interpretation can vary.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"US-Spain tax treaty (1990, as amended) addresses pension income. Under Article 17, pensions and other similar remuneration paid in consideration of past employment are generally taxable only in the residence country. US 401(k) and IRA distributions received by a Spanish tax resident are thus generally taxable in Spain as general income at progressive rates up to 47%. The treaty prevents double taxation but does not exempt the income from Spanish tax. Spain's tax authority may treat these as pension income subject to reductions applicable to irregular income in certain cases. The US retains the right to tax its citizens, so US expats must also file with the IRS. Foreign tax credits are available to avoid double taxation.","tax_rate":0.47,"locally_taxed":true,"treaty_protection":true}}

{"rate":0.28,"notes":"Spain taxes savings income (capital gains, dividends, interest) on a separate savings tax scale. Gains above 300,000 EUR are taxed at 28% as of 2024, with lower tranches at 19%, 21%, 23%, 25%, and 27%.","details":{"tax_type":"Capital Gains Tax","country_name":"Spain","country_iso_code":"ESP","source_references":["PwC Worldwide Tax Summaries - Spain","Agencia Tributaria (AEAT)"],"last_verified_date":"2026-06-03","general_description":"Capital gains in Spain are classified as savings income (rentas del ahorro) and taxed on a separate progressive scale distinct from general income. Gains from asset sales held over one year and short-term gains are both taxed on the savings scale. The savings scale rates run from 19% on the first 6,000 EUR up to 28% on gains above 300,000 EUR. Losses can be offset against gains of the same type.","corporate_capital_gains":{"rate":0.25,"tax_treatment":"Corporate capital gains are generally taxed as ordinary business income at the standard corporate income tax rate of 25%. Participation exemption may apply to gains on qualifying shareholdings of at least 5% held for at least one year."},"individual_capital_gains":{"rate":0.28,"tax_treatment":"Individual capital gains are taxed on the savings income scale: 19% up to 6,000 EUR; 21% from 6,000 to 50,000 EUR; 23% from 50,000 to 200,000 EUR; 27% from 200,000 to 300,000 EUR; 28% above 300,000 EUR. Short-term gains (assets held less than one year) are also taxed on the savings scale, not the general scale.","savings_tax_brackets":[{"rate":0.19,"up_to":6000},{"rate":0.21,"up_to":50000},{"rate":0.23,"up_to":200000},{"rate":0.27,"up_to":300000},{"rate":0.28,"up_to":null}]}}}

{"notes":"Dividends received by Spanish residents are taxed as savings income on the same savings scale as capital gains. The withholding tax on dividends paid to non-residents is generally 19% under domestic law, subject to reduction under tax treaties. The first 1,500 EUR of dividends was previously exempt but this exemption was eliminated. For US expats resident in Spain, dividends are taxed at the savings income rates.","rates":[{"rate":0.19,"type":"withholding","notes":"Standard withholding rate on dividends paid to non-residents under domestic Spanish law, before treaty reductions."},{"rate":0.15,"type":"withholding","notes":"Reduced rate under the US-Spain tax treaty for dividends where the recipient holds at least 10% of the paying company."},{"rate":0.19,"type":"flat","notes":"Savings income rate applicable to resident individuals on dividends up to 6,000 EUR."},{"rate":0.28,"type":"progressive","notes":"Top savings income rate on dividend income above 300,000 EUR for resident individuals."}]}