- Spanish Tax Glossary
- Retribuciones dinerarias
- Contribuciones empresariales a planes de pensiones
- Por alquiler de la vivienda habitual
- Por obras de mejora en vivienda
- Empresarios individuales
- Sistemas de previsión social
- Intereses de cuentas, depósitos y activos financieros en general
- Dividendos y demás rendimientos
- Renta inmobiliaria imputada
- Ganancias y pérdidas patrimoniales
- Retenciones y demás pagos a cuenta: Por rendimientos del trabajo
- Retenciones y demás pagos a cuenta: Por rendimientos de actividades económicas
- Devoluciones solicitadas por la Agencia Tributaria
- Spanish Businesses & Investments
- Opening a local business in Spain as a US citizen
- What types of local business structures are there in Spain, and what would be the US filing requirement?
- Your pension in Spain as a US citizen
- Spain Financial Accounts
Spanish Tax Glossary
The Terms below are based on the Impuesto sobre la Renta de las Personas Físicas forms Modelo 100 & Modelo D-100.
Gross Salary - Report the total amount of the annual Gross Salary in Income > Wages > Income Outside of the U.S. section of our Tax Questionnaire.
Contribuciones empresariales a planes de pensiones
Contributions paid by or on behalf of the individual to the pension scheme may not be excluded in computing U.S. taxable income. Employer contributions are added to gross annual wages for calculation of taxable earned income. Please report the aforementioned contributions in the Tax Questionnaire under the Income > Wages > Income Outside of the U.S. section of our Tax Questionnaire.
Por alquiler de la vivienda habitual
Rent of primary residence - If you rent, you likely qualify for the exclusion of housing costs. Please report your housing arrangements in the Tax Questionnaire under the Personal Details > Where I Live > Housing Arrangements tab of our Tax Questionnaire.
Por obras de mejora en vivienda
Home improvements - If you own rental property, please include the total amount for ALL improvements made since the purchase of the home in the Tax Questionnaire under the Income > Passive Income > Rental Income tab.
A sole proprietorship - business run by a single person that has no legal personality. Report details of the sole proprietorship on Income > Self-Employment tab of our Tax Questionnaire.
Sistemas de previsión social
Contributions to Spain Social Security system withheld from your paycheck or made on self-employment income are not deductible from the U.S. taxable income and do not qualify for the foreign earned income credit. If you contributed to Spain's Social Security System, please refer to Taxes & Deductions > Taxes Paid section.
Intereses de cuentas, depósitos y activos financieros en general
Interest income. The simplest kind of interest is if you have a bank account - the bank will pay you some percent for the privilege of holding your money. Report Interest Income in the Tax Questionnaire under the Income > Passive Income > Interest tab.
Dividendos y demás rendimientos
Dividend paid. Report your Dividend Income in the Tax Questionnaire under the Income > Passive Income > Dividends tab.
Renta inmobiliaria imputada
Report your rental income in the Tax Questionnaire under the Taxes & Deductions > Deductions tab.
Ganancias y pérdidas patrimoniales
Capital Gains and losses can be reported under the Income > Home Sale tab of our Tax Questionnaire, question Foreign tax paid on capital gains from property sale.
Retenciones y demás pagos a cuenta: Por rendimientos del trabajo
Income Tax on Gross Wages - Amount of foreign income tax paid or withheld. Can be utilized as a foreign tax credit to offset U.S. tax liability. Report tax imposed on Taxes & Deductions > Taxes Paid section.
Retenciones y demás pagos a cuenta: Por rendimientos de actividades económicas
Personal Income Tax on Self-Employment Income - Amount of foreign income tax paid. Can be utilized as a foreign tax credit to offset U.S. tax liability. Report tax imposed on Income > Self-Employment tab of our Tax Questionnaire.
Devoluciones solicitadas por la Agencia Tributaria
Tax Refund for tax overpaid. Report your tax refund in the Tax Questionnaire under the Income > Wages > Income Outside of the U.S. tab.
Spanish Businesses & Investments
Opening a local business in Spain as a US citizen
Of course, before opening a local business in Spain, you must have the right to live and work in Spain. You will also need to obtain a work permit. What’s more, you must decide on your business structure and register your business with the Spanish tax authorities.
What types of local business structures are there in Spain, and what would be the US filing requirement?
Sole Trader (Empresa Individual)
As a Sole Trader, you are self-employed. You will need to report your self-employment to the IRS via form Schedule C.
SA, SLNE, SRL/SL, SLA, SLL, and SC
In Spain, there are six types of limited companies you can choose including Sociedad Anonima (SA)Sociedad limitada Nueva Empresa (SLNE), Sociedad Limitada (SRL / SL), Sociedad Laboral Anónima (SLA), Sociedad Laboral Limitada (SLL), and Sociedad Cooperativa (SC).
The main differences between these limited companies are the minimum number of shareholders required and the minimum investment amounts. These limited companies are reported to the IRS via Form 5471.
Sociedad civil/Partnership -
Expats planning to go into business with one or more people may decide to register their business as a partnership. You will be required to report the partnership to the IRS via Form 8865.
Pequeñas Y Medianas Empresas (PYME)
Small and medium-sized businesses (corporations) are reported to the IRS via Form 5471.
Your pension in Spain as a US citizen
Pension Structures: The Spanish pension system is made up of three pillars.
- Pillar I: The Spanish state pension is compulsory for all residents working in Spain, with strict regulation on who can claim and when (i.e. Social Insurance and survivor’s pensions.
- Pillar II: Company and employee pensions. Conditions and availability depend on the employer.
- Pillar III: Private pensions make up the third pillar, which is voluntary and typically have more flexible conditions than the state Spanish pension (i.e.some allow you to withdraw your savings before the Spanish pension age.)
Spain Financial Accounts
Which types of Spain financial accounts the U.S. individual must report on FBAR / FATCA?
- Individual bank accounts such as savings accounts, checking accounts, and time deposits.
- Retirement accounts - balance on Pillar 2 and Pillar 3 accounts
- Brokerage accounts, commodity futures or options accounts,
- Insurance policies and annuity contracts with a cash value (i.e. such as a whole life insurance policy).
- Business accounts where U.S person has a greater than 50 percent interest in the entity
If you have bank accounts at Banco Cooperativo Espanol (BCE), Banco Etcheverria, Bancaja, Banca Civica SA, Bankia, Banco Financiero y de Ahorros (BFA), Banco de Valencia (BVA) or at another bank in Spain or any other foreign country, you may meet the filing requirement to disclosure your foreign accounts on the FBAR. .
Which types of Spain financial assets are not required to be reported on FBAR / FATCA?
- Social Insurance,
- Real Estate Holding,
- Precious metals held directly,
- Financial Account held at a US branch of a foreign financial institution.