US citizen paying taxes in Spain

Spanish: Basics section
Spanish: First tax filings section
Spanish: Basic software and sites section
Spanish: Income tax (IRPF; Renta WEB) section
Spanish: Wealth tax (Patrimonio, 714) section
Spanish: Foreign assets declaration (720) section
Spanish: ETE (Encuesta sobre Transacciones Exteriores) declaration section
Spanish: Inheritance and gift taxes (Impuesto sobre sucesiones y donaciones) section
Spanish: Other tax filings section
US: Federal income tax return (1040) section
US: Other federal tax filings (FBAR, FATCA) section
US: State tax return section
Deadlines section
Miscellaneous section
 


I am not a lawyer or accountant; this is not legal advice or tax advice; use at your own risk.



If I reside full-time in Spain, as a USA citizen with money in US bank accts, earning no money in Spain, having no assets or bank accts in Spain, will Spain tax me ?
Answer is: Yes.



I think there are two sets of agreements between USA and Spain: a Social Security Totalization agreement (which prevents a worker having to pay SS tax twice, and handles coordination of SS benefits if retiree worked in both countries), and a Tax Treaty (which tries to avoid or compensate for double taxation of other taxes, not SS tax).
SSA's "U.S. International Social Security Agreements"
IRS's "Spain - Tax Treaty Documents" (and follow link to Treasury Dept)
IRS's "Claiming Tax Treaty Benefits"



What I do:

I file my taxes as resident of both countries, and resident of New Jersey. I do this because I still have mailing address in NJ, voter registration there, driver's license there, US bank accounts using that address, credit card using that address.

For me, it doesn't matter because I'm a retiree with lots of savings but very little income, so my taxes are very low. I do pay a bit of wealth tax to Spain. Later it may become more of an issue as I start drawing taxable income from IRA's and 401K's and Social Security. Maybe I'll try to sever my NJ state residency at that point.





Spanish: Basics



I think: file at least the income tax and worldwide assets declaration each year, even if you owe no tax and have few assets. Get it on record that you are complying with requirements and have nothing to pay or little to declare.

From someone on "Expats in Spain" Facebook group:
It is imperative that every Spanish resident file an annual income tax return in Spain. This is despite any other advice you may have heard to the contrary. The Hacienda take a very dim view of Expats living in Spain and not fully declaring their worldwide assets and income for tax in Spain. There are heavy penalties for non-compliance, and it is key that you file a return even if you have minimum income as it demonstrates your tax residency correctly. This can be especially important for foreign national Spanish residents such as ourselves when the determination of where we are resident for tax purposes is important.

Basic ID numbers:
Need a Numero de Identidad Fiscal (NIF) to pay your taxes.
From NIE Number Online's "NIF Number":
"For foreigners in Spain, the NIF (fiscal identity number) and NIE (identity number for foreigners) are interchangeable, because the numbers will be the same ..."
From SpainExpat's "NIE, DNI, NIF, CIF, Social Security":
"Once you have an NIE, you do not need to re-apply for an NIF; if and when you have to pay taxes, use your NIE number."
Agencia Tributaria's "NIF (Personal Tax ID) of Individuals"





Spanish: First tax filings



If you establish residency in Spain late in the calendar year, do you have to file your first tax returns for that tax year, or for the first tax year in which you spend more than 183 days in Spain ?

From ExpatFocus's "Spain - Registration and Residency":
Residency in Spain is also linked to tax and if you meet certain criteria it is known as 'fiscal residence'. If you are in the country for more than 183 days of a calendar year you are considered to be resident and liable for taxes, regardless of whether or not you have the residence permit. This is mainly for those who travel between countries. If you go to Spain with the intention of spending the majority of your time there you could be considered to be liable for taxes immediately. Those who apply for the residence permit should be aware that this is considered to be evidence of intent to remain and will count against the individual if they try to claim that they are not liable for taxes.





Spanish: Basic software and sites



Agencia Tributaria's "Electronic Office"

Richelle de Wit's "How to Subscribe to Electronic Notifications Tax Office ?" (Notifications require Java)
Richelle de Wit's "Modelo 030 To Register With Agencia Tributaria"

My experience with various basics:


Agencia Tributaria's Appointment system




Spanish: Income tax (Impuesto de Renta sobre las Personas Fisicas, IRPF)



Filed by June 30 each year, for previous year. Basic form is form 100.

From Taxes For Expats's "U.S. Income Tax Return Preparation and Advice for American Citizen (Expatriates) Living in Spain":
Tax residents will need to pay income taxes in Spain and are generally defined as those who reside in Spain over 183 days in each calendar year and/or have their main financial interests in Spain. However, in many cases you only need to file a tax return in Spain when you make more than €22,000 per year, receive a rental income of more than €1,000 and/or receive a capital gains and savings income of more than €1,600.

From Experts for Expats' "Tax in Spain for Expats":
At the most basic level, Spanish tax residents are liable for to pay income tax on their worldwide income, once personal allowances have been taken into account.

However, a non-resident of Spain is only required to pay tax on any Spanish income (such as rental income from a Spanish property). The income tax for non-residents (Impuesto sobre la Renta de No Residentes, IRNR, form 210) is charged at a fixed rate and there are no personal allowances or deductions.

Some people say you can be "immigration resident" or "physically resident" in Spain but "tax resident" or "fiscally resident" only in USA, so avoid paying Spanish income tax:
See Article 4 of the US-Spain tax treaty (PDF).

Each year, file form 8802 (and $85) with IRS to get form 6166 from them, which certifies that you are federally tax resident in USA.
IRS's "Form 6166 - Certification of U.S. Tax Residency"
IRS's "Form 8802 - Application for United States Residency Certification" (PDF)
IRS's "General Instructions for Form 8802"

After getting US form 6166, do you file a Spanish income tax return, or just skip it ? Have to file US form 6166 with Hacienda ?

But from SBS's "Income tax Spain":
Personal income tax in Spain is levied on a resident individual's global income from any source. Typical examples of such are: Salary income, Subsidies received, Professional income, Capital gains, Interest payments, Rental income.
...
An individual would be considered to be a resident in Spain for personal income tax purposes if he/she remains in the country for more than 183 days in one calendar year. ...


Are USA Social Security benefits taxable by Spain ?
Bottom line: I don't know.

Related question: are distributions from 401K's and IRA's taxable by Spain ?

On US income tax return, from FindLaw's "Social Security: Your Payments While You Are Outside The United States":
If you file a Federal income tax return as an "individual" and your combined income is $25,000 to $34,000, you may have to pay taxes on up to 50 percent of your Social Security benefits. "Combined income" means your adjusted gross income plus nontaxable interest plus one-half of your Social Security benefits. If your combined income is over $34,000, you may have to pay taxes on up to 85 percent of your Social Security benefits.

From Taxes for Expats' "Social Security & Expat Taxes":
"Social Security payments originate from the US and can therefore not be claimed as part of a FEIE (Foreign Earned Income Exclusion)."

From Tax Partners' "Where should pay taxes Americans pensioners retired in Spain":
... with regard to pensions paid by the Social Security of the United States, as provided in Article 20.1 b) of the Tax Treaty, they may be subject to tax in the United States. In Spain, this pension is also subject to tax, taxed as employment income, for the full amount under the Personal Income Tax Act.

In this respect, the art. 24.1.a) of the Convention provides for the avoidance of double taxation, that "when a resident of Spain derives income which, in accordance with the provisions of the Convention, may be taxed in the United States based on criteria other than citizenship, Spain allow deduction of tax on income of that resident an amount equal to the tax paid in the United States"

Therefore, with respect to pensions paid by the Social Security of the United States, Spain has the obligation to eliminate the double taxation which could arise. In other words, the tax payer must include the benefits of Social Security paid by the United States in the annual income tax return but can deduct from the tax payable in Spain, the tax paid in the United States in respect of such Social Security pension.

Artio Partners' "Complete Guide to Social Security Benefits for American Expats Living Abroad"
Greenback's "US Expat Taxes Explained: Social Security"
ElderLawAnswer's "Getting Social Security While Living Overseas"
FindLaw's "Social Security: Your Payments While You Are Outside The United States"
Taxes for Expats' "Social Security & Expat Taxes"

From people on /r/Barcelona:
I'm employed by a company, you are not required to [file Renta] if you earned less than 21k brutos [pre-tax money] in 2015. I thought I was supposed to pay back some money so I did it just to check, and it turned out I was actually owed money, so ... try to do it online, you don't have to submit it if you don't want to.

...

Everyone working in Spain has to do it. [But] There is indeed an amount under which you don't have to do it. Hacienda will send you the papers and you can accept their number, it's as simple as that, 98% of the time they are accurate, they know everything about us. However, please check with a local at your work or your employer, you being foreigner this may be different process and I am no tax advisor.

From Abaco Advisers' "All you need to know about resident taxes in Spain":
We do recommend that you make an annual tax declaration whether this table [of thresholds] suggests you should or not. It will help you to prove your fiscal residency - a status which can save you money [usually in real-estate transactions].

From Advoco's "Spanish tax forms explained":
The most common way of completing this obligation, for those with simple tax affairs, is to request a borrador or draft tax declaration. This is automatically generated by the AT from their systems which contain employment, bank and other records so know what most people are due to pay (or receive by way of a rebate). For many people it is just a case of checking the draft and affirming its accuracy electronically, by phone or by signing the paper copy and giving it in to to a tax office or bank.

From Spain Accountants' "Rates and allowances 2015":
"Regional tax rates vary between the different regions of Spain (Comunidades Autonomas)."

Some income that is tax-exempt in USA (interest on US govt bonds ?) may not be tax-exempt in Spain. And capital gains are taxed higher in Spain, so you may owe the difference to Spain. No deductions for education expenses.

If paying income tax online, must have a Spanish bank account, and return must be filed by June 24 (called "domiciliacion", paying by direct debit) ? But also can pay through Hacienda web site using credit or debit card ? After the "domiciliacion" date, you have to pay by taking tax return to a bank and paying into Hacienda's account.

From someone on CAB FB group 1/2016:
If you only have a simple tax return to make (usually income from legal job, a bit of interest from the bank etc), you can make an appointment in the tax office and they do it for you for free [called "presencial"]. If it turns out, you owe them money and you are not obliged to declare they will tell you that. Also, if you are not obliged to declare and you are due a rebate, you can also declare voluntarily.

From someone on "Expats in Spain" Facebook group 3/2016:
[Some banks will do your income tax return for you ?] I USED to bank with Unicaja and the annual declaracion was included in the quarterly fees I had to pay. You could do it online or by phone, they would work out if you owed any tax, you went into your branch, signed the forms, one was sent to Hacienda, other was your record. Not bad (as long as you know exactly what you have earned).

Usually you download a tax-year-specific program called "PADRE" to do your tax return. But starting with the 2015 tax year, there is a new "Renta Web" online way of doing a return. Richelle de Wit's "Renta 2016 - Novelties, Relevant Dates and Deadlines" (requires CABS login)

Advoco's "Spanish income tax"
Advoco's "Do you need to submit a Spanish tax return?"
IRS's "United States Income Tax Treaties - A to Z"
Strong Abogados's "Personal taxes in Spain"
Expatica's "Tax in Spain"
Expatica's "Taxation in Spain"
Wikipedia's "International taxation"
Jose Marc Castro's "Retiring to Spain"
Experts for Expats' "Tax in Spain for Expats"
George Mills' "Spanish tax returns: A handy expat guide"
spainaccountants's "Spanish income tax 2015"
ExpatFocus's "Spain - Income Tax"
AngloINFO's "How Income is Taxed"
KPMG's "Spain - Income Tax"
Expats in Spain's "Personal Income Tax in Spain" (PDF)
Expats in Spain's "Personal Taxation in Spain - Double Taxation" (PDF)
PWC's "Global Mobility Services: Taxation of International Assignees - Spain" (PDF)
Philip Carroll's "Personal Taxation in Spain" (requires CABS login)
Philip Carroll's "Personal Taxation in Spain - Rates and Allowances" (requires CABS login)
Philip Carroll's "Personal Taxation in Spain - Double Taxation" (requires CABS login)
CincoDias's IRPF calculator

Lost in Sant Cugat's "I am your PADRE"
Philip Carroll's "Personal Taxation in Spain - Installing the PADRE System" (requires CABS login)
Philip Carroll's "Personal Taxation in Spain - Completing and Submitting a Tax Return - Part 1" (requires CABS login)
Philip Carroll's "Personal Taxation in Spain - Completing and Submitting a Tax Return - Part 2" (requires CABS login)
Apparently there is a new version of PADRE for each tax year, and it becomes available around beginning of April.
Spain Accountants' "2014 residents tax returns" (good overview of a tax return)

My experience with Renta WEB 2015, in 2016:








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Spanish: Wealth tax (Patrimonio, 714)



Form 714.

From AngloINFO's "Spanish Wealth Tax":
Spanish wealth tax is payable by non-residents and residents based on assets held at 31st December each year. Spanish residents are liable on their worldwide assets, and non-residents are liable to wealth tax on their Spanish assets only.

...

Bank balances are valued at the higher of the closing balance on 31st December or the average balance during the 4th quarter.

...

The wealth tax form has to be completed and tax paid between 2nd May and 1st July for the previous 31st December.

From Agencia Tributaria's "Period for presenting 2014 Wealth Tax":
Must file wealth tax return between April 7 and June 25.

From Visa Spain's "Spain reintroduces wealth tax. Impuesto del Patrimonio":
Wealth Tax is paid on the net amount of wealth of an individual. ... Wealth Tax is a national tax which is managed by each region, that is why some regions may apply credits to the tax and make it be effectively nil ... The regions can also set up their own minimum exempt. The National minimum exempt is €700.000 but this goes down in Catalonia to €500.000.

[Rate starts at about 0.2% of amount over the minimum exempt, and goes up.]

From Agencia Tributaria's "How the 2014 Wealth Tax return is presented":
Must file online, and it's separate from the personal income tax return.

From Agencia Tributaria's "Obligation to declare Wealth 2014":
Must file wealth tax return if: you owe money under the tax, or total value of property is greater than €2 million.

From Costa Gestion's "Spanish Wealth Tax in Andalucia":
The Spanish tax regulations state that cumulative wealth and income taxes cannot exceed 60% of a resident's total taxable income (there is no limit for non-residents), subject to a minimum of 20% of the wealth tax calculation. ...

The tax IS in effect for 2016 and 2017 tax years, according to Blevins Franks' "Another Year Of Wealth Tax In Spain".

Costa Gestion's "Spanish Wealth Tax in Andalucia"
BDO's "Wealth Tax Extended To 2013"
Blevins Franks' "Spanish Wealth Tax. How Does It Affect You And What Can You Do?"

My experience filing form 714 in 2016:






Spanish: Foreign assets declaration (720)



Not a tax, just another thing to file.

Form 720, to be filed by March 31 for assets owned outside Spain as of previous December 31.

From Ray Clancy's "Expats in Spain face new tax reporting requirements" 1/2013:
A new reporting regime in Spain means that expats with assets outside the country worth over €50,000 who are taxpayers will need to declare them [starting] in 2013. ...

...

'This is a new, additional requirement for Spanish taxpayers. You remain obliged, as always, to also fully declare your annual worldwide income for income tax purposes, and your taxable worldwide assets for wealth tax purposes', said a spokesman. 'From now on, anyone who is tax resident in Spain must declare all the assets they own outside Spain. ...'

One difference between the wealth tax and the assets declaration: wealth tax uses net values (e.g. property value minus mortgage balance), while assets declaration uses gross values (e.g. property value).

Jessica Winch's "Spain tells British expats to declare overseas assets"
Expats in Spain's "Declaration of Your Overseas Assets" (PDF)
Richelle de Wit's "Reporting Overseas Assets Modelo 720-1" (requires CABS login)
Myra Azzopardi Swainson's "Declaration of Your Overseas Assets" (requires CABS login)
Javier Ullastres Asesores's "Reporting Assets Outside Spain"
Janet Anscombe's "New rules on resident foreign assets reporting"
Abaco Advisers' "The 720 asset declaration form"
Strong Abogados' "Report of Foreign Assets (Form 720)"
Sede Electronica Modelo 720
Agencia Tributaria's "Help with Form 720"
Lost in Sant Cugat's "Modulo 720 time"

My experience with filing form 720 in 2/2016:

First, gather IBAN or Swift or BIC numbers for your banks and accounts. Best to contact your banks. Maybe see The Swift Codes and United States Bank Swift Codes. But confirm the numbers with your bank; the info for my bank in those sites was obsolete.

Go to Sede Electronica Modelo 720

Fill out top fields. Don't check either "Declaracion complementaria por inclusion de datos" or "Declaracion sustitutiva".

Click on "Bienes o derechos". Form will change to a table.

For each bank account, in turn:
Click on "+" to add a line to the table. Form will change again.

Fill in information. Don't fill in "NIF Representante"; you don't have a representative. In "Clave de condicion del declarante", select "1- Titular" (you are the owner). In "Clave tipo de bien o derecho", select "C- Cuentas abiertas en entidades que se dediquen al trafico bancario o crediticio y se encuentren situadas en el extranjero" (accounts at foreign banks).

In "Subclave de bien o derecho", select
"1- Cuenta corriento" (checking account) or
"2- Cuenta de ahorro" (savings account) or
"3- imposiciones a plazo" (time deposits) or
"4- Cuentas de credito" (credit accounts) or
"5- Otras cuentas" (other accounts), as appropriate.

In "Codigo de pais", select "US - Estados Unidos de America". It's in the list among the E's, not the U's.

In "Clave de identificacion de cuenta", select "O - Otra identificacion".

In "Codigo BIC", fill in the Bank Identifier Code or Swift Code for your bank. None of my banks had IBAN or BIC or Swift numbers, so I left it blank.

In "Codigo de cuenta", put account number.

In "Identificacion de la entidad", put official name of your bank.

In "NIF en el pais de residencia fiscal", I put "ABA nnnnnnnnn" for my bank.

In "Domicilio de la entidad o ubicacion del inmueble" section, put official address of your bank.

In "Fecha de incorporacion", I put Jan 1 of year I was declaring. Supposed to be the date when the account was created.

In "Origen del bien o derecho", put "A- Bien o derecho que se declara por primera vez o que se incorpora en el ejercicio de la declaracion". I think this is correct for first time you file a 720. Next year, select "M- Bien o derecho que ya ha sido declaracion en ejercicios anteriores" ?

In "Valoracion 1: Saldo o valor a 31 de Diciembre ...", put value of account on Dec 31, in Euros.

In "Porcentaje de participacion", put "100".

Click on green arrow button at bottom of page to check for errors.

Click on folder button ("Guardar declaracion") at bottom of page. It will save a file to your computer. If you stop filling out the declaration and come back some other time, import this file to pick up where you left off. And I think next year, you should be able to start by importing this file, and save a lot of typing.

When done, make sure you've saved to file one last time. And go back to first page of form, and see a total value for all accounts.

Then click "Firmar y enviar" to sign and send. See a "I confirm this all is true" page. Check the box and send.

See PDF form and "Su presentacion ha sido realizada con exito". Sending has succeeded. Save the PDF file to disk, maybe print it, maybe copy the confirmation numbers out of the first page of it.

My experience with filing form 720 in 3/2017:

Gather IBAN or Swift or BIC numbers for any banks and accounts that are new since last time you filed this form.

Go to Sede Electronica Modelo 720

Change to English.

Click Submissions / Filing financial year 2015 and following.
Choose ID method.
Get "Declarante y resumen de la declaracion" page.

Change "Ejercicio" field to previous year.
Click "Cargar" button at bottom of page.
Load ".ses" file from previously filed year.

Now page should have data from previously filed year, but "Ejercicio" field has changed to current filing year.

Correct anything in the top fields, such as phone number.
Don't check either "Declaracion complementaria por inclusion de datos" or "Declaracion sustitutiva".

Click "Guardar" button at bottom of page.
It will save to a new ".ses" file on your computer.
If you stop filling out the declaration and come back some other time, "Cargar" this file to pick up where you left off.

Click on "Apartados / Bienes o derechos" in bottom left of page.
Form will change to a table.

For each bank account that is SAME as last year, in turn:
Put check-mark in check-box for account.
Click "Ver bien o derecho" button at top of page.
Update amount for account.
Click "Ver declarante" button to go back to list of accounts.

Click "Guardar" button to save to ".ses" file.

For each bank account that is NEW since last year, in turn:
Click on "+" to add a line to the table. Form will change again.

Fill in information, as given in my previous year's experience, above.

Click on green arrow button at bottom of page to check for errors.

Click "Guardar" button to save to ".ses" file.

When finished with all accounts, review all values on 2nd page, go back to 1st page, click "Validar declaracion" button to validate the form, get "No existen errores" result.

Click "Guardar" button to save to ".ses" file.

Then click "Firmar y enviar" to sign and send.
See a "I confirm this all is true" page.
Check the box and send.

See PDF form and "Su presentacion ha sido realizada con exito". Sending has succeeded. Save the PDF file to disk, maybe print it, maybe copy the confirmation numbers out of the first page of it.





Spanish: ETE (Encuesta sobre Transacciones Exteriores) declaration



For worldwide assets/transactions over €1 million.

Electronic filing only, to the Bank of Spain before January 20 for previous year.

It applies to any individual or company (except financial companies) resident in Spain.

It applies if assets outside Spain are over €1 million, as well as other cases.

inforconta's "ETE Declaration"
Grupo Belmar's "Declaracion de Transacciones con el Exterior al Banco de Espana. ETE"
Javier Ullastres Asesores's "Declaracion de Transacciones con el Exterior al Banco de Espana. ETE"
Borja Canete's "A quien debo informar de las cuentas en el extranjero?"
Banco de España's "Formulario ETE"
ETE law (PDF)

My experience with filing ETE 1/2016:

Banco de España's "Formulario ETE"

For assets/transactions between €1M and €50M, you want the "summary" statement.

You download and fill out either a PDF file or XML file. I used PDF.

If PDF file, use Adobe Acrobat Reader, not some third-party PDF-reader application such as FoxIt.

What exchange rate to use when converting US dollar amounts to Euros ? Sent email to the bank, got no response, IRS hasn't published rates for 2015, used rate from here, $1.08589/€. Later, someone said use Bank of Spain exchange rates as of Dec 31.

In the form, I checked "active" (the first choice, "Operaciones financieras activas con el exterior (09 01 01)"). All it asked for was totals for start and end of year, and totals for transactions; didn't have a line for each account separately, no way to list names of accounts or account numbers. I took my end-of-year number and put it in both the start and end fields, and put zeroes in the transaction and interest fields. Clicked "Validar" button to validate the form. Saved the file to disk.

To transmit the completed file to the bank, you must have an FNMT digital certificate installed on your computer.

Record the "Referencia" number you get at the end.

My experience with filing ETE 1/2017:

Exchange rate: this document (PDF) referenced by this Banco de España page says Euro = $1.0541 on 12/30/2016.

Downloaded new PDF from "Formulario para la declaracion anual resumida (Version actualizada a octubre 2016) Archivo PDF: Abre en nueva ventana (1 MB)" on Banco de España's "Formulario ETE"

Fill out PDF as done for 1/2016, copying data from old PDF where possible.

In the form, I checked "active" (the first choice, "Operaciones financieras activas con el exterior (09 01 01)"). Copied final total from 2015 form to starting total ("Saldo inicial") in 2016 form. Put new total from accounts 12/31/2016 in final total ("Saldo final") for 2016.

Subtracted the two numbers (inicial and final) and put the difference in net ("Transacciones netas"). A dialog popped up and wanted me to put in numbers for "inversions" and "desinversions", to add up to the net number. Since I had a net gain, I just put the net total number in the "inversions" field.

Clicked "Validar" button to validate the form. Saved the file to disk.

Sent PDF via "Personas físicas / Envío de declaraciones" on Banco de España's "Formulario ETE" (click "Browse" to select PDF file on disk, then "Anadir" to add it to list to send, then "Enviar" to send it). Got a nasty-looking "Compruebe que esta enviando la ultima version" message, but I am sending latest version of file, clicked "Confirmar".

Record the "Referencia" number you get at the end.

Check "Descarga de respuestas" a few days later to check that it was received okay. I checked 6 days later, nothing appears in the list.





Spanish: Inheritance and gift taxes (Impuesto sobre sucesiones y donaciones)



Terminology:
"Estate tax" is paid by the estate of the deceased person.
"Inheritance tax" is paid by the heirs of the deceased person.
USA has (federal and state) estate taxes.
Spain has inheritance tax.

From Taxes For Expats's "U.S. Income Tax Return Preparation and Advice for American Citizen (Expatriates) Living in Spain":
Inheritance and gift taxes are levied on behalf of the 17 autonomous regions, which set their own tax rates within certain limits. If they do not, national limits apply. A tax on wealth transfers applies to rights and assets located in Spain.

From Spanish Solutions' "Good News on Spanish Inheritance and Donation Tax":
Currently inheritance tax is paid by a beneficiary on an inheritance they receive in Spain. This is calculated by looking at the net assets in Spain of the deceased person, applying a tax-free allowance which differs depending on the relationship between the deceased and the inheritor, calculating the percentage tax applicable to the inheritance and then making a final calculation.

From Deloitte's "Spain Highlights 2016 (PDF)":
Inheritance and gift tax is levied where the heirs or donees are resident in Spain or where the inherited or gift assets are located in Spain. Rates range from 7.65% to 34% (rates in certain regions may be higher). The tax also is imposed on nonresidents receiving assets (e.g. estates) located in Spain. Spain's autonomous regions have the authority to increase or reduce the tax burden.

If I am resident in Spain and inherit money in USA, will I have to pay Spanish inheritance tax on it ? Suppose the estate tax paid in USA was zero; does that change the situation in Spain ? Suppose I later move the money to my bank account in Spain; does that change the situation in Spain ?

From someone on "American Expats in Spain" Facebook group:
I am wondering if there are any Americans here who have declared an inheritance from the USA and successfully appealed and won the case agaist the Spansh tax system.

I know this has been resolved for EU members (inheritance is calculated according to the law in country of death, but not so yet for the USA or non-EU countries).

It is absolutely devastating to see them be able to tax an inheritance in this way.

Those residents here ... really look into this if there is an inheritance in the future of any amount. It is not a pretty scene.

Global Property Guide's "Inheritance tax and law"
Barry Davys' "Guide to Inheritance Tax in Catalunya"
Spanish Property Insight's "Spanish succession tax"
Worldwide Lawyers' "A Guide to Claiming Spanish Inheritance Tax refunds" (PDF)
Legal 4 Spain's "Tax FAQs"
Lost in Sant Cugat's "What kind of marriage do you have?"

See "Spanish Will" section of my Moving to Spain page.





Spanish: Other tax filings



If you own a business, property, or car, there will be forms to be filed and taxes to be paid.

Each time you rent out your property, a form has to be filed ? Maybe can bunch them up into quarterly reports.

If your income is high, you may have to pay estimated tax quarterly ?

IBI (Impuesto Sobre Bienes Inmuebles): local property tax.

Expatica's "Taxation in Spain"
If you are non-resident, yet own property in Spain, you have to pay "non-resident tax" (form 210).
Abaco Advisers' "All you need to know about non-resident taxes in Spain"
Advoco's "Spanish non resident tax"




US: Federal income tax return (1040)



File by April 15 (approximately) each year, for previous year.

USA taxes US citizens on their worldwide income.

File a return each year, even if you have no income, or no income subject to US tax, or your income falls below the taxable threshold, or you owe no tax. Stay on record, don't create any question that you might be evading taxes.

File IRS form 8822 (once) to inform IRS of your new address, if your old US address now is invalid.

Many online services enable you to file tax returns electronically, for free or for $20 or so. This may not work well if your tax situation is complex. If you have to file Form 8938 (FATCA) with your return, check to see if your online service supports that form (for example Taxslayer.com does not, as of 2/2017). Some online services may force you to upgrade to a premium edition if you need to file form 2555 for Foreign Earned Income Exclusion. Some online services may not let you file a tax return from a computer outside USA ? Some online services may not let you e-file a tax return with a foreign address (for example Turbotax Free Edition does not, as of 3/2016).

Expats get an automatic 2-month extension on the deadline (IRS page), but have to pay estimated tax by the original deadline, then pay interest (for that 2 months) on the additional tax due when the final return is filed. Does that extension include extension for filing Form 8938 (FATCA) ? I'm told yes.

From IRS's "Yearly Average Currency Exchange Rates":
"The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently."

Taxes For Expats's "Expat Tax Guide"
Taxes For Expats's "Expat Tax Obligations"
IRS's "Taxpayers Living Abroad"
IRS's "Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad"
Jane A. Bruno's "The Expat's Guide to U.S. Taxes" (PDF) (2009)
Form to get Randall Brody's "U.S. Expat Tax Guide" (mostly about FEIE, Foreign Tax Credit, FBAR, FATCA, back filing)
Jonathan Lachowitz's "Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)"
Don D. Nelson's "US Expatriate Tax Rules Every Expat Living Abroad Needs to Know"
"US Expat Tax Questions" Facebook group
IRS's "Get Transcript"


If your US taxes are very complicated, you may want to use an expatriate tax service for your US tax return. Such as:
Greenback Expat Tax Services

Some items:





US: Other federal tax filings (FBAR, FATCA)



You must file certain forms if you have more than $10K in a foreign bank account at any time during the year, own more than a 10% ownership interest in a foreign corporation, or are the beneficiary or trustee of a foreign trust. Some forms are filed with your tax return, some separately (and on separate deadlines).



FBAR / 114:
If the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the year, the FBAR form (FinCEN Report 114) must be filed electronically, separate from income tax return, by April 15 each year. Automatic six-month extension. See IRS's "Report of Foreign Bank and Financial Accounts (FBAR)".

Taxes For Expats's "FinCEN Form 114 (FBAR)"
Treasury's "FBAR Filing Info"

From someone on reddit:
"The $10k limit is counted as the sum of the max amount of each account during the year, so if you have $5k in one account and then transfer it to another, then that counts as $5k + $5k = $10k, despite never actually having had $10k."

If you are required to file an FBAR, you must report ALL non-US bank and financial accounts, even if the balances are small or zero.

From discussion on "US Expat Tax Questions" Facebook group:
A 'defined benefit pension plan' is a promise (but not a guarantee) to pay, and as such it is not a financial asset, and therefore not reportable for FBAR purposes.

If your pension scheme meets the definition of "social security", then most likely it is not reportable. If it does not meet the "social security criteria, then it is probably an "annuity" and therefore reportable.

Defined Benefit Pension Plans do not have to be reported on the FBAR - but you can if you want. The reason is that the plan is not in your name, you have no disposition powers, and there is no guarantee of payment just a promise of payment.

There is no penalty for reporting things that don't need to be reported.

My experience with filing FBAR 4/2016:

Treasury's "Individuals Filing the Report of Foreign Bank and Financial Accounts (FBAR)"

No registration required. Have to give email address and phone number at start. Will have to fill in mailing address and SSN in form.

No way to save form halfway and continue later; have to do it in one shot. [But someone else said this is not true.]

I filed a mostly-empty form (I have no foreign bank accounts), just to see how the process goes, so I don't know if there's anything tricky about entering the bank account information. You will need to know maximum account value during the year, bank name, account number, and bank mailing address. If there are multiple owners, you will need to know name, TIN, and mailing address for each owner.

Have to click the "Sign" button at the end; it does nothing but show a dialog saying "I acknowledge I am signing this document" and then puts "Signed" in a form field.

Then click the "Submit" button.

Get a confirmation page, copy the info, download a PDF copy of your submitted form.

View the saved PDF form to make sure everything is right.

Receive an email confirmation that your form was received.

Two days later, receive another email confirmation, giving a BSA Identifier. Save that.

Someone said you can fill in a PDF form and then upload this, instead of doing the web pages. An advantage of the PDF is that next year you can un-sign it and modify it and submit again, saving a lot of work.



FATCA / 8938:
Also, if you control certain other foreign assets, you have to file Form 8938 (FATCA). Attach Form 8938 to the annual income tax return, so deadline would be April 15. See IRS's "Foreign Account Tax Compliance Act" and IRS's "Types of Foreign Assets and Whether They are Reportable on Form 8938".

Individuals don't have to file FATCA if: the individual otherwise does not have to file an income tax return, or individual lives full-time outside USA and owns less than $200K of foreign assets. See the IRS pages linked below.

Some online tax-return software doesn't support form 8938 (for example Taxslayer.com does not, as of 2/2017).

Taxes For Expats's "Frequently Asked Questions about Becoming and Remaining Compliant with FATCA (Form 8938)"
IRS's "FATCA Information for Individuals"
IRS's "Information for U.S. Taxpayers on Form 8938 Requirements"



IRS's "Comparison of Form 8938 and FBAR Requirements"

I asked the question:

Is it possible, and is it advisable, to file FATCA and FBAR reports just to say "I have no foreign bank accounts" ?

Answer from someone: "If you don't need to file, then there is no reason to send in a blank form. However, the Department of Treasury's efile system will still accept FBARs with no foreign bank accounts listed."



From /u/TaxTalkinGuy on reddit:
KEEP YOUR STOCK MARKET INVESTMENTS IN THE US

Investing in non-US mutual funds can be a tax reporting nightmare and result in higher tax in some circumstances. It's much easier to simply keep investing in US mutual funds through a US brokerage account.

If you own stock of a non-US mutual fund, you'll be required to file IRS Form 8621, which is complicated in the best of circumstances and impossible to comply with in the worst. Also, the non-US mutual fund will be subject to a complicated regime called the "passive foreign investment company" rules, which often result in worse US tax treatment as compared to owning US mutual funds. Finally, investing in non-US mutual funds can have non-tax detrimental effects as well, such as generally higher fees and more risk (very few countries have equivalents of the FDIC and SIPC).

RESEARCH THE US TAX TREATMENT OF LOCAL TAX-ADVANTAGED ACCOUNTS

If you're planning to stay in your new country long-term, it's tempting to dive right into saving through the local array of tax-advantaged accounts. However, some research into the US tax treatment of each particular offering will go a long way in avoiding headaches on your US tax return.

Certain types of plans require more reporting than others. For example, if the plan has a trust structure (so that by holding the account you're really the beneficiary of a trust), you may find that your US tax reporting burden will be lessened if you don't make contributions yourself to the trust (or only make contributions to certain portions of the trust). This can get complicated and is fact specific, so it requires careful research and planning with each particular type of savings vehicle in mind.



Jonathan Lachowitz's "Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)"
Annie Hill's "The Expat Guide to U.S. Personal Finance" (links to many articles)




US: State tax return



File by April 15 (approximately) each year, for previous year.

You may still have a "tax domicile" in your home US state; if so, you have to file a state tax return.

In New Jersey (my state): a "non-resident" state tax return is for those who earn income or own property in the state, but reside outside the state and pay state tax to another state.

I asked the question:

Is there any problem with appearing to be "resident" in two countries, both USA and (in my case) Spain ?

I am a US citizen, about to move to Spain and get residency there. I would like to maintain my US mailing address (my brother's house), my US driver's license, US credit card, US bank accounts, voting. I probably won't bother to get any of those things in Spain.

I don't mind paying tax to both places, since I'm a retiree living off savings, so pay almost zero income tax to Feds and state in USA. And it seems simplest just to keep filing the normal forms in USA. And putting my USA address on those forms, not my Spain address. I would file FBAR and FATCA forms as required.

Is this legal ? Is it wise ? I don't want to have to inform my US banks and credit card of my foreign address. I may move back to USA some day, and things would be simpler then.

Answer from someone on "US Expat Tax Questions" Facebook group:
If you want to be treated as a resident of both countries, no one will object as long as you file a tax return in both countries, declare your worldwide income to both countries, and pay any tax imposed on that income by both countries. Several of my clients in Italy do this as a matter of choice. Sometimes there are valid reasons to do so. I for example always paid self-employment tax to both countries on the same income to increase my retirement benefits in both countries.

Answer from someone else on "US Expat Tax Questions" Facebook group:
[Maybe more about federal return ?]

If you keep your resident status in your tax filing, you will enjoy the regular tax credit but you will be taxed on your foreign income. On the other hand, if you file as non-resident you will enjoy tax exemption for foreign income up to $100,800 for 2015. Also, you still will be able to file your taxes as non-resident and you don't have to mention a foreign address. You may keep your US address on your tax return, as long as you have a good connection with this address.

...

You do pay fine if you don't enroll in ObamaCare, unless if you file your tax as US NON RESIDENT, then you are exempted from that fine.


From Taxes For Expats's "Expat Tax Guide":
Some of the criteria that a state looks at to determine if you are a resident for state income tax purposes includes your driver license, if you register to vote there, if you maintain an address there, the location of your bank accounts, if you own or rent real property there, the license plates on your cars, and if you still receive utility bills in that state. There are many other factors used by state taxing agencies to determine if you are a resident, but they are too numerous to mention here. You must be careful to reduce or eliminate all indices of residency or your previous state of residency in the U.S. will come after you for state income taxes. You must carefully plan your departure from your previous home state by reviewing your states tax residency laws and taking the actual steps necessary to prove to that state you no longer have a "tax domicile" there after you move abroad. If you do not, the taxes, penalties and interest later assessed by that state can be huge.

Many online services enable you to file state income tax return electronically, for $20 or so. This may not work well if your tax situation is complex. And some may not support the part-year feature (for the year in which you moved) or the non-resident tax return. Some may require a US mailing address on the tax return.

Taxes for Expats' "State Taxes and American Expats"
Taxes For Expats's "State Taxes and the American Expat"
TaxMeLess's "do I have to file a U.S. state return each year?"
Chaz Attamah's "Moving to Spain? 5 Things to know about US Expatriate Tax Compliance."




Deadlines



Annual filing deadlines:





Miscellaneous



I'm told that annualcreditreport.com will not let you request credit reports from a computer outside USA.







This page updated: February 2017.



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