Banking, Money and Taxes in Spain
- Purchase the complete Expat Arrivals Spain Guide (PDF)
Expats will find that managing money in Spain is easy but expensive. Banking facilities are generally modern and function quite efficiently, but bank charges and commissions on international transfers are hefty when compared to most other countries in the European Union.
Additionally, filing taxes and organising large purchases can translate into a bureaucratic nightmare. It is often necessary to employ the help of a Spanish-speaking specialist to manage the maze of red tape.
Currency in Spain
Since 1999, as with the majority of other EU member-states, Spain has used the Euro (EUR) as its official currency. One euro is divided into 100 cents.
Notes: 5 EUR, 10 EUR, 20 EUR, 50 EUR, 100 EUR, 200 EUR and 500 EUR
Coins: 2 EUR, 1 EUR; and 50, 20, 10, 5, 2 and 1 cents
Note that the Spanish separate large figures into thousands with a full stop rather than a comma.
Banking in Spain
Spain has one of the highest bank branches per capita on the European continent and most offer online banking with fast, easy transfers. In recent years many mobile banking options have become available in Spain, with banks such as BBVA offering mobile wallets for card-free transactions.
When choosing a bank as an expat without knowledge of the local language, it is best to select a branch with English-speaking staff and an option for statements and documentation to be translated into English.
Banking fees in Spain are notoriously high and a variety of charges might be encountered, including debit card transaction fees, correspondence fees (when the bank communicates with a customer) and transfer fees. Most banks also charge a small sum for opening an account.
There are quite a few international banks that offer services in English and allow free transfers between branches around the world, as well as multi-currency accounts. HSBC and Barclays are popular with Britons moving to Spain, as well as many other expats.
Banks in Spain generally open from Monday to Friday, 8.30am to 2pm, and on Saturday mornings from around 9am to 1pm. There are some banks which open on Thursday afternoons instead of Saturday mornings, so it is worth checking the specific opening hours of each branch before visiting.
Opening a bank account
Expats can either open a resident or non-resident bank account in Spain. Non-resident accounts can be held in foreign currencies and normally have higher fees, while resident accounts tend to offer more services, have higher interest rates and lower commissions. Resident accounts can only be opened by those with a Spanish tax identification number or Número de Identificación de Extranjeros (NIE).
ATMs and credit cards
ATMs (cajeros automáticos) are widely available and normally accept foreign cards. Expats who are yet to open a local bank account will find that these machines provide the best exchange rates, but transaction charges do apply.
Alternatively, currency exchange offices (cambio) can be found at most airports and in most tourist areas. The exchange rates they tend to offer are less attractive than those provided by banks.
Debit and credit cards are widely accepted in Spain, although transaction charges will apply if someone is using an international debit or credit card.
Taxes in Spain
It is important for expats to check whether their country has any tax treaties with Spain and the European Union, such as a Double Taxation Avoidance Agreement (DTAA). This ensures that they will not be double taxed at any point.
Income taxes must be paid for any year that an individual spends more than 183 days in the country – at this point, a person becomes a formal Spanish tax resident and is liable to be taxed for their international assets and accounts as well as those within the country.
Expats living in Spain need an NIE, which can be obtained at the local police station, in order to be identified by the Spanish revenue service (Agencia Tributaria).
Expatriates who work on a freelance basis or who run a business will also have to register as an autonomo with the local government. It is worth hiring a tax assessor to help navigate the complex Spanish system.
It is important for non-European expats to keep all receipts since value-added tax (VAT) is paid back when they leave the country or the Eurozone. This could be a hefty sum for expats who have lived in Spain for an extended period of time.