Permits and Taxes in Spain

It is a very good idea to consult an international tax advisor before you move to Spain. If you are about to sell your business and move to Spain, you may want to first establish yourself as a resident in Spain and then sell the business.

In general, the double taxation agreement allows you a tax credit in the US for taxes paid in Spain and visa versa. It is important to distinguish yourself as a resident or non-resident. As a non resident you are only taxed on income derived in Spain. As a resident of Spain you will be taxed on your world wide income.

When leaving Spain you need to apply for tax clearance, You will need to pay an estimated amount of taxes due for that year. If that amount turns out to be too high, you can request a refund.

Capital Gains Tax
Capital gains are due when you sell Real Estate, antiques, art, stocks, a business etc. Capital losses can be deducted from capital gains. If the losses exceed the profits, these losses can carry forward. It is very similar to capital gain taxes in the United States. It concerns the sales price minus your costs including the costs of the sale. A nice feature is that residents over 65 years of age are exempt from capital gains on their residence. If you are under age 65 and re-invest in Spanish real estate within 3 years , you won't need to pay capital gains, as long as the investment is equal to, or larger than the sales amount. Again, it is important to determine if you are a resident or non-resident, capital gains for a resident will be treated as income in the year the gain was made.

Inheritance and Gift Tax
Spain levies inheritance tax on assets and moneys received as an inheritance or gift. It is important to understand that estates of residents and non-residents are liable for inheritance tax. The tax is payable by the heirs or beneficiaries and not by the estate. Taxes must be paid within 6 months, although you may file for another 6 month extension. However, if the estate is transferred to the spouse, parent or child, a 95 % deduction may apply. The condition is that the spouse, child or parent has lived with the deceased for at least 2 years prior to his or her death. You should ask for legal advise about the tax liability and the maximum amount for this exemption. The amount of taxes due depends on the relationship with the deceased.