Spain’s wealth tax is getting complicated this 2023 and it will be the same for next year. Why is this happening? Because they just passed a bill where the Solidarity Tax appears and it is a complement to the already existing Wealth Tax in Spain. If you are thinking about living in Spain and need a law firm in Marbella with extensive experience in the sector, contact us.
In this article we are going to help you understand the current situation. However, we really encourage you to find a lawyer in order to help you go through all these taxes.
What is the Spanish Wealth Tax and the new Solidarity Tax?
The Wealth Tax is an annual tax you need to pay on the total net value of your assets. These are all assets and rights of economic context owned by a natural person deducting charges and encumbrances which diminish its value, as well as personal debts and obligations. The Solidarity Tax is a complement to the Wealth Tax.
The rate and levels depend on the region. The Solidarity Tax aims to standardize the tax on HNWIs whose assets exceed a value of €3 million.
When does it come into effect?
The Solidarity Tax comes into effect from December 2022. So it will be applicable on tax declarations made in 2023 and 2024 for the previous tax year, which is the calendar year. For now, this tax will only affect these two years.
What is the 60% rule for wealth tax in Spain?
It is about restructuring the investments in order to avoid paying the Wealth Tax, or paying less. That can be possible if the sum of the full Wealth Tax liability with the Personal Income Tax liability does not exceed 60% of the sum of the general and savings taxable bases for Personal Income Tax.
What are the rates of the new Solidarity Tax?
There are three levels: 1.7%, 2.1% and 3.5 %. Learn more about the 3% non residents tax.
Who pays Wealth Tax?
It depends on the region you are based, but normally both, residents and non-residents, are obligated to pay it.
Wealth Tax for residents
Generally, they pay tax on worldwide assets if the total gross value of the goods exceeds €2 million.
Wealth tax for non-residents
They pay tax on Spanish assets only if the total gross value of goods in Spain exceeds €2 million.
What is included in my assets taxed?
Your total assets over €700.000.
Assets levied by the wealth tax
Real Estate, bank deposits and investments, assets and rights owned by individuals related to professional or business activities, luxury assets, art objects and antiques, life insurance, royal rights, administrative concessions and intellectual property rights.
Spanish wealth tax exemptions
Household contents, excluding the ones mentioned above. Works of art and antiques, economic rights like pension rights, business assets when they come from a professional activity that is your main source of income and must be carried out on habitual basis, intellectual property rights in the author’s ownership and shares in entities with some requirements.
When do I have to submit my wealth tax declaration?
The Wealth Tax declaration has to be submitted from April to June 30th of each year, which is the income tax period in Spain.
Frequency answers
What happens if I already pay wealth tax outside Spain?
If there is a double-taxation treaty with the country you are already paying the tax, it may be applied. If there is not any treaty, you probably will need to pay the Wealth Tax in Spain as well.
What happens if I already pay regional wealth tax?
If the region where you live in Spain levies Wealth Tax, the amount you pay regionally will be deducted from your liability for the new Solidarity Tax.
As your net worth in Spain is high, you should pay attention to all these updates. From GM Lawyer we will be glad to assist you by providing guidance.
