Spanish taxation in 2023

3. Spanish tax residents get a general €700,000 allowance plus €300,000 against the main home. Therefore, solidarity tax only really affects those with wealth over €4 million.

4. You can deduct the amount paid in the regular wealth tax from your solidarity tax liability, so you do not pay tax twice.

Solidarity tax

The new, but temporary, solidarity tax was approved at the end of December and applies for the 2022 and 2023 tax years (when it will be reviewed). 2022 labilities will be due between April and

By Jon Pemberton,

June this year.

In summary –

1. It only applies to those with net wealth above €3 million (worldwide assets for residents).

2. The progressive tax rates are 1.7% for wealth over €3 million, then 2.1% for wealth over €5,347,998 and 3.5% for over €10,695,996.

5. A taxpayers’ combined solidarity, wealth and income tax liability cannot exceed 60% of the sum of the personal income taxable bases. If it does, the tax liability will be reduced until the 60% threshold is reached (maximum reduction 80%).

The solidarity tax is applied at state level, so autonomous communities cannot amend it (as they can with the regular wealth tax).

The start-up law – digital nomads and the Beckham law tax regime

After years of negotiation, the law for the promotion of the start- up ecosystem companies has been approved. Its main objective is to attract and retain investment and talent in Spain and the key new features relate to immigration and taxation. A new ‘digital nomad visa’ has been created and the socalled ‘Beckham tax regime’ (which originated when David Beckham was playing for Real Madrid) has been modified.

This special tax regime can apply to individuals who become resident as a consequence of working in Spain, and has now been expanded to include teleworkers and entrepreneurs. If you meet the requirements, you can be taxed as a non-resident for your year of arrival and the following five years.

You can now apply if you were not tax resident here for the previous five years (it used to be ten), and it is available to those on a non-EU/EEA employment contract and non-EU/EEA nationals who obtain the residence visa for teleworkers.

The rules are detailed and complex, so if you think are you are eligible, seek personal advice.

It is sensible to review your tax planning regularly in any case, but more so following tax reforms. You need to understand how the changes affect you personally and make sure you are making the most of the local tax regime. As with all wealth management, your tax planning needs to be structured around your personal situation and objectives and to take your estate planning wishes into account.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

You can find other financial advisory articles by visiting our website here www.blevinsfranks.com.