The Spanish Impatriates Tax Regime in 5 Questions

Thanks to Law 28/2022, of December 21, which amended article 93 of the Personal Income Tax Act, it is easier to qualify for the Spanish impatriates tax regime, with benefits also extending now to family members. The following Q&A provides the basic details of this beneficial tax regime for new tax residents in Spain.

1.- How do I qualify for the Spanish “impatriates” tax regime?

An individual may qualify for the Spanish “impatriates” regime in the event of non tax-residency in Spain for the past 5 years (down from 10) before becoming a tax resident. Applicants are thus given the option to be taxed pursuant to the Personal Income Tax rules for Non-Residents (“Impuesto sobre la Renta de No Residentes” – IRNR).

2.- Who can apply to the Spanish NHR regime?

The following groups may apply:

A) Employees (except for professional athletes) when:

• A new labour relationship is initiated with an employer in Spain;
• When the posting is ordered by the employer, a letter of posting is in place and the taxpayer does not derive income through a permanent establishment in Spain.

B) Entrepreneurs pursuing innovative activities or of special economic interest.
C) Highly qualified professionals who work for an emerging company or who pursue training, research, development and innovation activities, when remuneration thereof represents at least 40% of their total professional/labour income.
D) Company directors of Spanish companies, regardless of shareholding percentages in said company. The only exception being asset-holding companies where said percentage must be less than 25%.
E) Digital nomads: whether posted or not by their employers, but keep performing remote services exclusively through IT systems and devices. This requirement is automatically met whenever the applicant is in possession of a Spanish digital nomad visa.

3.- Which are the benefits?

A) Qualifying individuals will have their worldwide professional/labour income taxed at a flat rate of 24% during the first tax period when residency is acquired and the next 5 tax periods (6 years in total). This rate applies up to an annual income of € 600,000 in any tax year. Excess income will be levied according to the rates in the top tax bracket.
B) Foreign income will not be taxed.

4.- Can family members also benefit from the Spanish NHR regime?

Yes, the applicant’s spouse and children under 25 (or, regardless of age, if disabled) may benefit from the regime as well. If the applicant is unmarried then the other parent of the applicant’s children may benefit. However, the sum of the net tax bases of the family members may not exceed that of the main applicant.

5.- Does this regime apply to pensioners?

It does not apply to pensioners who will pay income tax according to the relevant rates.

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SPANISH IMPATRIATES TAX REGIME

Highly Skilled Worker (D3) Visa in Spain

What is the Highly-Skilled Worker Visa?

For dependent employees who wish to live and work in Spain, the D3 visa would be an appropriate option. The Spanish D3 visa grants additional benefits such as quicker processing, longer initial duration and extended family reunification.

1.- Main requirements

The applicant must provide proof of: a.1) employment agreement or promissory employment agreement with a minimum duration of 6 months; or a.2.) freelance agreement; or a.3) company certificate of good standing; b) salary must be equal to at least b.1) a minimum annual salary of € 54,478 for directors and managers; b.2) a minimum annual salary of € 40,400 for other jobs; c) occupation within Group 1 or 2 of the National Classification of Occupations and proof of qualifications; d) proof of the relevant qualifications if occupation falls under a regulated profession (eg, a medical practitioner must be properly qualified and licensed); e) higher education or equivalent minimum 3-year professional experience.

A dwelling in Spain (eg, a lease agreement or a title of ownership) is a positive element but not mandatory upon visa application.

2.- Which companies are eligible to hire highly-skilled workers?

There are two possibilities:

1. companies that meet one of the following requirements: a) average staff of more than 250 employees in the 3 months before submission of application; b) annual turnover in Spain greater than 50 million euro or own funds greater than 43 million euro; c) average annual foreign investment not less than one million euro in the 3 years before the submission of the application; d) companies with stock value greater than 3 million euro according to the Registry of Foreign Investment of the Ministry of Economy; e) smes belonging to a strategic industry as per report by the General Directorate of International Commerce and Investment.
2. for companies considered of interest by the General Directorate of International Commerce and Investment: a) a significant increase in job creation; b) maintenance of employment; c) significant increase in job creation in the industry or territory where the activity will take place; d) an extraordinary investment that will impact the industry or territory where the activity will take place; e) grounds of general interest for Spanish investment and commercial policy; f) a relevant contribution to scientific or technological innovation.

3.- Family reunification

The D3 allows the joint application for reunification of the following family members: a) spouse/partner; b) children under legal age (18) or above legal age if single and financially dependent; c) minors or handicapped under the applicant’s custody; d) financially dependent ascendants.

For one family member the applicant must show proof of financial resources equivalent to x1.5 IPREM or € 900/month. For each additional family member an extra € 300 are required.

4.- Temporary and Permanent Residency (TR/PR) and Citizenship

The visa holder must travel to Spain within 3 months of issuance of the visa. From the moment of entry, the applicant has 3 months to register with the Spanish Social Security. One month from said registration the applicant must obtain the residency card which is valid for 1 year. When renewed, the card is valid for 4 years. PR is possible after 5 years of residency (the applicant cannot be away for a total of 10 months over the 5 years or 12 months if due to work reasons). Depending on the applicant’s nationality, with 2 or 10 years of residence, a citizenship application is possible.

5.- Cancellation of the TR/PR

• TR: The applicant cannot be away from Spain for more than 6 months in a one-year period.
• PR: The applicant cannot be away from the EU for 12 consecutive months.

6.- What if the main applicant does not live in Spain?

The spouse or partner may apply for an independent TR in case of: a) death of the main applicant; or b) legal separation or divorce, or cancellation or termination of partnership, when the spouse/partner has lived in Spain with the applicant for at least two years; c) sufficient financial resources, which means: 1) € 2,400/month in 2024 for a non-lucrative TR; or 2) one or more employment agreements for a minimum duration of one year, in the case of an employee TR (minimum wage required); or 3) meets conditions for an entrepreneur TR.

Minors may obtain an independent TR when they reach legal age (18) and: a) have lived in Spain for at least 5 years; or b) possess sufficient financial resources, which means: 1) € 2,400/month in 2024 for a non-lucrative TR; or 2) one or more employment agreements for a minimum duration of one year, in the case of an employee TR (minimum wage required); or 3) meets conditions for an entrepreneur TR.

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

(D3) VISA IN SPAIN

Family Reunification (D6) Visa in Spain

1.- Can I reunify or sponsor family members with my Spanish visa application?

Yes, this is possible. It is worth noting, however, that different types of visa may have different financial requirements or affect the eligibility of family members.

2.- What happens in the freelance/entrepreneur (D2) visa?

D2 visas allow the reunification of the following family members after one year of legal residency: a) spouse/partner; b) children under legal age (18) or handicapped; c) minors or handicapped under the applicant’s custody. When the applicant is in possession of a permanent residency card, the applicant’s parents and in-laws can be reunified if they are over 65 years old, financially dependent and there are reasons that justify the need to authorize their residency; exceptionally, they may apply if under 65 due to humanitarian reasons.

For one family member the applicant must show proof of financial resources equivalent to x1.5 IPREM or € 900/month. For each additional family member an extra € 300 are required.

3.- What happens in the highly qualified employee (D3) visa?

The scope of eligible family members is somewhat larger here: a) spouse/partner; b) children under legal age (18); c) children 18 and above, if the child is dependent: ie, single and still studying; d) financially dependent ascendants. Another relevant difference is that the family application may take place simultaneously with the main applicant’s one.

For one family member the applicant must show proof of financial resources equivalent to x1.5 IPREM or € 900/month. For each additional family member an extra € 300 are required.

4.- What happens in the non-lucrative (D7) visa?

The D7 visa allows the reunification of the following family members after one year of legal residency: a) spouse/partner; b) children under legal age (18) or handicapped when under the applicant’s custody. Applicant’s parents and in-laws can be reunified when the applicant is in possession of a permanent residency (PR), if they are over 65 years old, financially dependent and there are reasons that justify the need to authorize their residency; exceptionally, they may apply if under 65 due to humanitarian reasons.

The applicant must provide proof of financial resources of € 600 per family member (equal to x1 the IPREM index).

5.- What happens in the Golden Visa and the Digital Nomad Visa?

The scope of eligible family members is somewhat larger here: a) spouse/partner; b) children under legal age (18); c) children 18 and above, if the child is dependent: ie, single and still studying; d) financially dependent ascendants. Another relevant difference is that the family application may take place simultaneously with the main applicant’s one.

The Golden Visa applicant must show proof of financial resources equivalent to € 600/month per family member (equal to x1 the IPREM index).

The Digital Nomad Visa applicant must show proof of financial resources equivalent to 75% of the Spanish minimum salary for the first family member. For each additional family member, an extra 25% of the Spanish minimum salary is required. (Minimum monthly salary in Spain for 2024 is € 1,134).

6.- What happens in the case of non-EU family members of EU/EEA citizens?

Family members eligible for reunification in this scenario are: a) spouse or de facto partner; b) children less than 21 years of age or financially dependent; c) parents and spouse’s/partner’s parents who are financially dependent. The following documents are required:

a) Proof of relationship with the main applicant;
b) Proof of main applicant’s financial resources (eg, employment agreement or registration with the Spanish Social Security);
c) Proof of financial dependency;
d) Main applicant’s certificate of residency.

Extended family members (eg, grandchildren, grandparents, brothers…) may also be reunified, as long as there is evidence of financial dependency, or that due to health or disability the main applicant must take charge of said family member.

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(D6) VISA IN SPAIN

Non-Lucrative (D7) Visa in Spain

What is the Non-Lucrative (D7) Visa?

The D7, also known as the non-lucrative visa, is a type of visa for applicants who receive passive forms of income: dividends, pensions, interest, royalties, rental income…

1.- Main requirements

The applicant must provide proof of financial resources as follows: minimum monthly income in 2024 of € 2,400 (equal to x4 the IPREM index); plus € 600 per family member (equal to x1 the IPREM index). A dwelling in Spain (eg, a lease agreement or a title of ownership) is a positive element but not mandatory upon visa application.

2.- Family reunification

The D7 allows the reunification of the following family members after one year of legal residency: a) spouse/partner; b) children under legal age (18) or handicapped when under the applicant’s custody. Applicant’s parents and in-laws can be reunified when the applicant is in possession of a permanent residency (PR), if they are over 65 years old, financially dependent and there are reasons that justify the need to authorize their residency; exceptionally, they may apply if under 65 due to humanitarian reasons.

3.- Temporary and Permanent Residency (TR/PR) and Citizenship

The visa holder must apply for a TR card within 12 months since the date of issuance of the visa, so the initial visa is transformed into a 1-year TR card. The renewed card is valid for 2 years. PR is possible after 5 years of residency (the applicant cannot be away for a total of 10 months over the 5 years or 12 months if due to work reasons). Depending on the applicant’s nationality, with 2 or 10 years of residence, a citizenship application is possible.

4.- Cancellation of the TR/PR

• TR: The applicant cannot be away from Spain for more than 6 months in a one-year period.
• PR: The applicant cannot be away from the EU for 12 consecutive months.

5.- What if the main applicant does not live in Spain?

The spouse or partner may apply for an independent TR in case of: a) death of the main applicant; or b) legal separation or divorce, or cancellation or termination of partnership, when the spouse/partner has lived in Spain with the applicant for at least two years; c) sufficient financial resources, which means: 1) € 2,400/month in 2024 (equal to x4 the IPREM index) for a non-lucrative TR; or 2) one or more employment agreements for a minimum duration of one year, in the case of an employee TR (minimum wage required); or 3) meets conditions for an entrepreneur TR.

Minors may obtain an independent TR when they reach legal age (18) and: a) have lived in Spain for at least 5 years; or b) possess sufficient financial resources, which means: 1) € 2,400/month in 2024 (equal to x4 the IPREM index) for a non-lucrative TR; or 2) one or more employment agreements for a minimum duration of one year, in the case of an employee TR (minimum wage required); or 3) meets conditions for an entrepreneur TR.

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

(D7) VISA IN SPAIN

Spanish Digital Nomad Visa

At the end of 2022, the Spanish Parliament passed Law 28/2022, of December 21, for the promotion of the ecosystem for emerging companies. Said Law in turn amended Law nº 14/2013, of September 27, for the support of entrepreneurs and their internationalization, which introduced Spain’s version of the digital nomad visa. This type of visa allows candidates to enter Spain and work remotely for a foreign company or employer. Said work may be performed as a freelancer or employee.

1.- How long is the visa valid for?

The visa is valid for one year.

2.- Which are the requirements

a) Work must be performed remotely only.
b) Proof of a real and continuous activity of the company the digital nomad provides services to (minimum one year).
c) Employees of foreign company: proof of a pre-existing working relationship with said company (minimum 3 months).
d) Freelancers: proof of a pre-existing working relationship with said company (minimum 3 months). Freelancers may provide services to companies established in Spain if said work does not exceed 20% of the digital nomad’s total activity.

3.- Is a TR application possible?

The visa holder may apply for a TR.

4.- How long is the TR card valid for?

The initial TR card is valid for 3 years. The renewal card is valid for 2 years. PR and/or citizenship applications are possible after 5 years of residency.

5.- Cancellation of the TR/PR

• TR: The applicant cannot be away from Spain for more than 6 months in a one-year period.
• PR: The applicant cannot be away from the EU for 12 consecutive months.

6.- Is proof of financial resources required?

Yes, the applicant must provide proof of x2 minimum monthly salaries (MMS), ie, € 2,268 (MMS in Spain for 2024 is € 1,134). For the first family member the applicant will have to add 75% of the MMS, ie, € 850.50; for each extra family member the applicant will have to add 25% of the MMS, ie, € 283.50.

7.- Can I reunify family members?

Yes, reunification is possible for the following members: a) spouse/partner; b) children under legal age (18); c) children 18 and above, if the child is dependent: ie, single and still studying; d) financially dependent ascendants.

The Digital Nomad Visa applicant must show proof of financial resources equivalent to 75% of the Spanish minimum salary for the first family member. For each additional family member, an extra 25% of the Spanish minimum salary is required. (Minimum monthly salary in Spain for 2024 is € 1,134).

8.- Are there tax advantages associated to this type of visa?

Yes, digital nomads may apply for the Spanish “impatriate” tax regime, and benefit from a flat tax rate of 24% on their salary/professional income up to € 600,000/year. Please see our newsletter on the “impatriate” tax regime.

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

SPANISH DIGITAL NOMAD VISA

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

GOLDEN VISA FOR SPAIN

The Spanish Permanent Residence Permit: How and When

When a non-EU citizen has successfully obtained a visa to enter Spain and then become a temporary resident, the next possible step would be to apply for permanent residency or citizenship, provided that the necessary requirements in either case are met. In this newsletter we will explore said requirements for a permanent residency application, along with the characteristics, obligations and benefits of holding a permanent residence permit.

1.- How can I become a permanent resident (PR) in Spain?

Non-EU citizens may apply for Spanish PR status if they meet the requirements established by Organic Law nº 4/2000, of January 11, and relevant regulation:

a) holder of a temporary residence permit for at least 5 years. The applicant can only remain away from Spain a total of 10 non-consecutive months during those 5 years or 12 non-consecutive months if due to work reasons, but never more than 6 consecutive months;
b) clean criminal record;
c) be a legal resident in Spain at the time of the application.

No proof of income or knowledge of the Spanish language are required.

2.- How long is the PR status for?

There is no period of validity, although the card itself must be renewed every 10 years.

3.- What are my rights as a PR in Spain?

As a PR you are entitled to:

a) education;
b) work in Spain (whether self-employed/freelance or as an employee);
c) access to healthcare;
d) access to justice;
e) training and vocational retraining.

4.- Does PR status in Spain allow me to live anywhere in the EU indefinitely?

No, permanent residents in Spain are subject to the same advantages and restrictions as temporary residents.

5.- Which family members can I reunify?

a) Spouse or de facto partner; b) children under 18; c) the main applicant’s or spouse’s ascendants, if they are over 65 years old, financially dependent and there are reasons that justify the need to authorize their residency; exceptionally, they may apply if under 65 due to humanitarian reasons.

6.- Are there minimum stay requirements for PR holders?

The PR holder cannot leave the EU for more than 12 consecutive months (certain exceptions may apply).

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

SPANISH PERMANENT RESIDENCE

Spanish Citizenship by Residency

1.- Can I acquire Spanish citizenship through residency?

Yes, as a rule a 10-year residency period is required.

Applicants born in the following countries require just a 2-year residency period: Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Philippines, Portugal, Puerto Rico, Uruguay, Venezuela and people of Sephardic origin.

A 1-year residency applies to the following applicants who: a) were born in Spanish territory; b) did not properly exercise the right to acquire Spanish nationality by option; c) have been legally subject to the guardianship, custody or fostering of a Spanish citizen or institution for two consecutive years, even if the applicant is still in this situation at the time of the application; d) at the time of the application, have been married to a Spanish citizen for a year and are not legally or de facto separated; e) the widower or widow of a Spanish citizen, if at the time of the death of the spouse they were not separated, de facto or judicially; f) were born outside Spain to a father or mother, grandfather or grandmother, provided that all of them had originally been Spanish.

2.- Do I need to stay in Spain for 10/2 years uninterruptedly?

The Spanish Civil Code states that citizenship applicants must prove continuous (ie, uninterrupted) and legal residence for the relevant length of time. The Spanish Directorate General for Registers and Notaries has established the following interpretation:
10-year rule: the maximum period of absence in any given year during the 10-year period is 6 months; ie, an applicant may not be away for more than 6 consecutive months.
2-year rule: the maximum period of absence in any given year during the 2-year period is 3 consecutive months at a time (ie, multiple exits are not computed).
Also, a citizenship application must be submitted while the residency permit is still valid.

3.- When does the time start running?

From the moment of the approval of the applicant’s residency. When in doubt a certificate of residency may be requested.

4.- What are the benefits of Spanish citizenship?

The main benefits are: a) full freedom of movement in the Schengen area; b) live, work or study in any EU-member country; c) lower university fees for EU citizens; d) no minimum stay requirement to maintain citizenship; e) larger/easier family reunification.

5.- As a Spanish citizen will I be considered a tax resident in Spain?

No – only if you fulfill one criterium to become a tax resident in Spain: ie, a) spending more than 183 days in Spain; or b) your main economic interest or activity lies in Spain, whether directly or indirectly; or c) your spouse and under-age children live in Spain.

6.- Must I take an exam to acquire Spanish citizenship?

Yes – there is an exam on the Spanish Constitution (weighing 60%), and culture and history (weighing 40%).

Applicants must also pass an A2 level test in Spanish (diploma in Spanish as a foreign language, known as DELE). Citizens of Argentina, Bolivia, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Uruguay and Venezuela are exempt from the DELE exam.

7.- Is dual citizenship allowed?

Dual citizenship is allowed only for citizens of Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, France, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Philippines, Portugal, Puerto Rico, Uruguay and Venezuela.

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SPANISH CITIZENSHIP

The Spanish Impatriates Tax Regime in 5 Questions

Thanks to Law 28/2022, of December 21, which amended article 93 of the Personal Income Tax Act, it is easier to qualify for the Spanish impatriates tax regime, with benefits also extending now to family members. The following Q&A provides the basic details of this beneficial tax regime for new tax residents in Spain.

1.- How do I qualify for the Spanish “impatriates” tax regime?

An individual may qualify for the Spanish “impatriates” regime in the event of non tax-residency in Spain for the past 5 years (down from 10) before becoming a tax resident. Applicants are thus given the option to be taxed pursuant to the Personal Income Tax rules for Non-Residents (“Impuesto sobre la Renta de No Residentes” – IRNR).

2.- Who can apply to the Spanish NHR regime?

The following groups may apply:

A) Employees (except for professional athletes) when:

• A new labour relationship is initiated with an employer in Spain;
• When the posting is ordered by the employer, a letter of posting is in place and the taxpayer does not derive income through a permanent establishment in Spain.

B) Entrepreneurs pursuing innovative activities or of special economic interest.
C) Highly qualified professionals who work for an emerging company or who pursue training, research, development and innovation activities, when remuneration thereof represents at least 40% of their total professional/labour income.
D) Company directors of Spanish companies, regardless of shareholding percentages in said company. The only exception being asset-holding companies where said percentage must be less than 25%.
E) Digital nomads: whether posted or not by their employers, but keep performing remote services exclusively through IT systems and devices. This requirement is automatically met whenever the applicant is in possession of a Spanish digital nomad visa.

3.- Which are the benefits?

A) Qualifying individuals will have their worldwide professional/labour income taxed at a flat rate of 24% during the first tax period when residency is acquired and the next 5 tax periods (6 years in total). This rate applies up to an annual income of € 600,000 in any tax year. Excess income will be levied according to the rates in the top tax bracket.
B) Foreign income will not be taxed.

4.- Can family members also benefit from the Spanish NHR regime?

Yes, the applicant’s spouse and children under 25 (or, regardless of age, if disabled) may benefit from the regime as well. If the applicant is unmarried then the other parent of the applicant’s children may benefit. However, the sum of the net tax bases of the family members may not exceed that of the main applicant.

5.- Does this regime apply to pensioners?

It does not apply to pensioners who will pay income tax according to the relevant rates.

This presentation is for information purposes. If you would like to download a PDF copy of this guide, click the button.

SPANISH IMPATRIATES TAX REGIME