Taxation of US Social Security pensions in Spain
I am a US retired US citizen and want to move to Spain. I only have a SS pension, which is not taxable in the US. Do I have to pay taxes in Spain?
Spanish residents are taxable on their worldwide income. Foreign source income (like SS and retirement payments, except public pensions) are fully taxable in Spain, though the tax payer can claim the foreign tax credit relief according to articles 20 and 24 of the Tax Treaty. If the tax payer did not pay any tax abroad, then the tax credit would be zero.
Tax form 720 for US non lucrative Visa holders
We moved to Spain in January of this year (2017) on a non-lucrative visa, and received our residency cards. Since we have not been residents for 183 days, do we need to complete a modelo 720 regarding our foreign assets this year?
Form 720 must only be filed by resident tax payers. In 2016 you were not resident in Spain, so you are not obliged to submit this form. For more information about this tax obligation read our post Foreign assets disclosure in Spain (form 720)
Do you need to open a bank account in Spain?
Yes. Once the name of the new company is awarded (that is, the Central Mercantile Registry in Madrid issue a “clearance certificate”, that is, a certificate stating that the name is available since no other existing company has a similar name) you could open a bank account for the new company in formation. This bank account is to be used to fund the initial share capital. The amounts deposited in the account would not be released by the bank until the incorporation process has been fully completed, i.e, the new company has been registered in the Mercantile Registry. Once the funds are deposited, the bank shall issue an affidavit stating that the share capital has been paid in. This certificate is to be handled to the notary before whom the company is to be incorporated. When the funds are sent to the bank account is important to make sure that in the wire transfer concept it is clearly stated that the funds are for the share capital of the new company. It is also important that the funds are sent from an account pertaining to shareholder of the new company (avoiding, for instance, transfers from other group companies…)
That said, the Spanish Company Law does not require that the bank account of the newly company is within a Spanish bank. So, theoretically, a bank account could be opened in a foreign bank. Then the bank affidavit, if not in Spanish, should be translated into Spanish, legalized before a notary and apostilled. It is extremely unusual this scheme and, since a Spanish Company is likely to need at some point a bank account at a Spanish Bank, it makes sense to do it right from the start.
Tax form 720 -foreign assets disclosure for impatriates
If I enjoy the special tax treatment for foreign employees seconded to Spain (Beckam Law), shall I file tax form 720 (foreign assets disclosure)?
The Tax Law does not say specifically that tax payers enjoying the special tax regime for foreign employees seconded to Spain are exempt from filing the tax form 720 (foreign assets disclosure).
Read more about the obligation to disclose foreign assets
However, the Tax Office has released a note acknowledging that tax form 720 is not due for these tax payers. This opinion is based on the fact that the information to be provided only makes sense for tax payers taxed on their world-wide income, but not to others, as seconded employees enjoying the Beckam Law regime, who are only taxed on their Spanish source income.
Read more about the tax regime for foreign employees seconded to Spain
Are the NIE and the NIF the same thing ?
Yes and no.
The Numero de Identificación Fiscal (“NIF”), must be applied for at the Tax Office, and the number would be the same than the NIE, which is released by the Police. So NIE and NIF are different things (because they are released by different authorities and for different purposes) but actually have the same digits. In short, by knowing your NIE you already know what would be your NIF, but this does not mean that you have a NIF until the Tax Office assigns it to you. Actually, most people uses both numbers as synonyms.
Income earned in foreign currency
With respect to the income earned in US Dollars ($) How do I go about reporting the equivalent amount in euros
If you have to report foreign source income earned in US Dollars in your Spanish Income Tax return, which you will normally should, said income is to be calculated based on the conversion rate between the Euro and the Dollar valid at the time that each income was earned. No averaging is allowed.
Working under a non lucrative Visa
I have moved to Spain under a non lucrative Visa, but I will go from time to time to United States to work for a few clients. Is this allowed ?
A non lucrative visa would not prevent you from working abroad. In other words, what you cannot do is working in Spain, either as an employee or as a self employed. But there is nothing in the Law which prevents you from working or doing business elsewhere.
Taxation of a 100 % disability pension from Norway
I am a Norwegian planning to move to Spain. Due to an accident I am not able to work. I receive 100% disability pension from Norway. Where do I have to pay taxes?
According to the Tax Treaty between Norway and Spain, your disability pension would only be taxable in Spain if you become resident in Spain. The tax treatment of the disability pension is complex; it varies depending on the type of disability and the amount involved. In certain cases, the pension can be completely exempt from taxation.