How to file your declaration with payments in your country
Filing your declaration at the AEAT
You have to file your income tax declaration IRPF (Impuesto sobre la Renta de las Personas Físicas) in Spain if you have your habitual residence in Spain when any of the following circumstances occurs:
- Stay in Spain for more than 183 days during the calendar year. Your sporadic absences are counted, unless you prove your tax residence in another country. In the case of countries or territories classified as tax havens, the Tax Administration may require proof of permanence in said tax haven for 183 days in the calendar year.
- The core or base of its activities or economic interests is located in Spain, directly or indirectly.
If a natural person is a tax resident in Spain, he or she is liable for Personal Income Tax (IRPF, Impuesto sobre la Renta de las Personas Físicas) and must pay taxes in Spain on his world income , that is, he must declare in Spain the income obtained anywhere in the world, without prejudice to the provisions of the Convention to avoid international double taxation signed between Spain and the country of origin of the income.
Deduction for international double taxation
In the Spanish AEAT system this deduction for international double taxation happens in “cuota líquida”, or “net tax liability”. That means thay you deduct the amount you have already paid in your origin country according to their tax regulations. You can deduct the smallest out of these two amounts:
- What you have already paid in your origin country
- What you would have paid in Spain for that income had you got it in Spain (average effective tax rate)
International Double Taxation Calculator
| General Part | |
|---|---|
| General Base | |
| Income Abroad | |
| Tax Paid Abroad | |
| Savings Part | |
| Savings Base | |
| Savings Abroad | |
| Savings Tax Paid Abroad | |
Results
| General Part | Savings Part | TOTAL | |
|---|---|---|---|
| Paid Abroad | €0.00 | €0.00 | €0.00 |
| Payable in Spain | €0.00 | €0.00 | €0.00 |
*This is a basic calculator following the example below.
Deduction to avoid double-taxation is explained below, following with an example, with information copiet from the AEAT.
General deduction regime
In cases where, among the taxpayer's income, income or capital gains obtained and taxed abroad appear, the lesser of the following two amounts will be deducted:
- The effective amount of what was paid abroad due to a tax of an identical or analogous nature to Personal Income Tax or the Non-Resident Income Tax as a consequence of obtaining said returns or capital gains.
- The result of applying the average effective tax rate to the part of the taxable base taxed abroad.
Average effective general tax rate, determined by the following operation: Total liquid fee x (general full fee / total full fee) ÷ General liquidable base
Savings tax type, determined by the following operation: Total liquid installment x (full savings installment / total entire installment) ÷ Liquidable savings base.
Part of general taxable base taxed abroad, determined by applying the reduction that proportionally corresponds to the income obtained abroad and integrated into the taxable base. This operation can be represented by the following formula:
General taxable base x income obtained abroad) ÷ Positive components of the general taxable base.
Example
In the income tax return for the 2023 financial year of Mr. ABT, 30 years old, single and resident in Malaga, the following figures appear:
- General tax base: 36,000
- Savings tax base: 12,000
Within the general tax base, whose components are all positive, there are 6,000 euros obtained abroad, the taxpayer having paid in the country of obtaining a tax of a nature analogous to Personal Income Tax the amount of 1,100 euros.
Similarly, the tax base of savings, whose components are all positive, includes net income from movable capital in the amount of 6,000 euros and a capital gain derived from the transfer of an asset element in the amount of 6,000 euros and for which paid abroad for a tax analogous to IRPF the amount of 1,080 euros.
Answer:
Deduction for international double taxation (the lesser of A or B)
A. Cash amount paid abroad
By performance: 1,100
For capital gain: 1,080
B. Input tax in Spain
Part of the liquidable savings base (6,000 x 16.60%) = 996
Part of the general taxable base (5,200 x 17.10%) = 889.20
Amount of the deduction for international double taxation (the lesser of A or B)
For income (889.20) + For capital gain (996) = 1,885.20
It's essential to maintain proper documentation, including proof of residency, details of income earned in each country, and evidence of taxes paid or withheld. This documentation may be required in case of an audit or inquiry by tax authorities. In summary, a tax treaty provides a framework for determining which country has the primary right to tax specific types of income. It helps to avoid or mitigate the impact of double taxation. Understanding the provisions of the relevant tax treaty is crucial when filing a tax declaration.
FAQS on International Deduction
To apply the exemption, is it necessary for the income corresponding to the work actually performed abroad to be taxed in the country or territory where it is performed?
The regulation only requires that in the territory where the work is performed, a tax of an identical or analogous nature to this tax is applied and that it is not a country or territory that has been officially designated as a tax haven.
This requirement will be considered fulfilled when the country or territory where the work is performed has signed an agreement with Spain to avoid international double taxation that includes an information exchange clause.
It is not required, therefore, for the income to be effectively taxed in that country or territory.
When can it be understood that there is an identical or similar tax to the IRPF in the relevant country?
Taxes that aim to impose on income, even partially, will be considered as identical or analogous taxes, regardless of whether the tax base is the income itself, revenue, or any other indicative element of it.
Social Security contributions will also be considered as such, under conditions that are determined by regulations.
It will be considered that an identical or analogous tax is applied when the relevant country or territory has signed an agreement with Spain to avoid international double taxation that is applicable, with the special provisions outlined in it.
Taxation regarding a pension paid to a resident in spain and accrued in denmark.
According to the provisions of the treaty (*) to avoid double taxation signed with Denmark:
1) if the pension is private, it can only be subject to taxation in Spain.
2) if the pension is public, due to services rendered to the danish state or any of its subdivisions, entities, or organizations, it will only be subject to taxation in Denmark.
(*) Considering that since 2009, there is no international double taxation avoidance treaty between Spain and Denmark, all income originating in Denmark that is obtained by a tax resident in Spain is taxed in Spain. If such income is taxed in Denmark, the taxpayer can apply the deduction for international double taxation provided for in Article 80 of Law 35/2006, of November 28, on Personal Income Tax (IRPF).