The new digital nomad visa comes with great advantages, and taxes are where they shine the most. Remote workers who hold this new permit will be able to enjoy a special tax regime with plenty of tax deductions, provided they meet certain requirements.
In this article, we will explore everything you need to know about the digital nomad visa tax and how those online workers are taxed in the country. We will see the exact tax rates they must face, and also solve the now so-common question of whether they must pay taxes in Spain and also in their country of origin or not.
If you spend over 183 days per year in Spain (within the calendar year), you will be regarded as a tax resident.
And, also, if you spend less than those 6 months but your economic or professional center of interest is in the Spanish territory, then you would also be regarded as a tax resident.
As a digital nomad visa holder, you must spend at least 183 days per year in order to renew your residency; so you cannot avoid becoming a resident.
This, of course, has important implications, but as we will see, this new visa comes with great advantages in this area.
As a tax resident, you are liable to pay taxes in Spain as any other national would.
When it comes to income tax, for example, this means you must pay income tax on the income you obtain worldwide: both in Spain and in any other country.
This latter fact, as a digital nomad who works remotely, is of great importance.
The general rule states that the applicable income tax is a progressive tax rate that depends on your income and that can reach up to 50% (depending on the area, as some regions in Spain do offer lower income tax rates).
Nevertheless, one of the benefits of obtaining a digital nomad residency is that you would just pay a flat fee (which is much lower).
If you want to learn more, keep reading. We are about to analyze which are these tax befits in-depth and solve the mystery of having to pay twice for your taxes (abroad and in Spain).
Special tax regime for digital nomads
The newly created startup law came with big changes and advantages, and perhaps one of the most important ones is the possibility of applying for a special tax regime as a remote worker.
That is, if you obtain your digital nomad visa (once you obtain your positive resolution), you will be allowed to apply for the Beckham Law, the famous tax regime that allows you to be considered a non-resident for tax purposes.
You can access a complete guide on the Spanish Beckham Law here.
This means that, after obtaining this regime, and even though you would be considered a resident because you spend over 183 days in the country, for tax purposes you would not.
This helps you avoid paying income tax at a progressive rate, and enjoy reduced taxation.
But that is not all. You will also avoid paying wealth tax, and you will not need to file declarative model 720.
But be careful. In order to be able to qualify for this special tax regime, there is a crucial requirement you must meet.
That is, you can’t have been a resident of Spain for the past 5 years. Before the startup law came into force, that period was set to 10 years, but this reduction is another of the advantages that it brought.
Spain digital nomad visa tax
Digital nomad visa holders, as non-residents for tax purposes, will face a fixed tax rate of 24% on just the incomes they obtain in Spain (not worldwide income) up to 600.000€ (instead of paying up to 50%).
For any income that exceeds that amount, then the (fixed) rate would be 47%.
On the other hand, we also find the tax rate applicable to capital gains.
That includes, for example, selling shares, properties, interests, or stocks.
In those cases, the digital nomad tax would be:
- 19% up to 6.000€
- 21% from 6.001€ to 50.000€
- 23% from 50.0001€ to 200.000€
- 27% from 200.001€ to 300.000€
- 28% from 300.001€ onwards
Do I need to pay taxes in several countries?
One of the questions we are getting asked the most has to do with the necessity to pay twice for the same taxes.
The nature of a digital nomad is that of someone who constantly moves from one country to another, working remotely while traveling.
That may generate a situation in which different countries claim that the digital nomad is a resident in all of them (as, according to their taxation rules, they are). So, in theory, this would create the obligation to pay the same tax twice.
Or take the case of those who are employed by a company in their home country, but who work from Spain.
Do they need to pay the same tax at origin and then also in Spain?
The answer is, as always, it depends.
And in this case it depends on what the laws of your country of origin are, and on whether Spain has a double treaty convention with the other country or not.
Those treaties clearly specify the rules to determine where exactly is the digital nomad a tax resident (and hence how to untie the situation).
Based on that, the double treaty will help you avoid paying the same tax twice. And that can be done through 2 different methods: the exemption method and the tax credit method.
No matter your case, it is always crucial to have a consultation with a tax lawyer in order to fully understand your situation and see where and how should you file your taxes.
Our team of lawyers is ready to help through an in-depth consultation in which we will analyze your situation, see if you can benefit from a double-taxation agreement, and guide you step by step: