Banking, Money and Taxes in Spain
When arriving in Spain it is important to quickly register for a social security number. Employers will do this on the expats behalf but if one is working for oneself it is important to do it quickly. Being registered provides access to the medical system, banking system and general bureaucracy and is the means by which taxes are levied.
The NIE identification card is an important tool, and it allows for the opening of a resident’s bank account, amongst many other things. Generally a resident’s account has fewer charges at lower rates. It can be very useful to get the NIE card before one makes landfall. One can apply for the card at the ones local Spanish embassy, but this can only be done after one has a social security number. The queues in Spain can be long, and it is more efficient to do this chore outside of the country.
The NIE identification card is an important tool, and it allows for the opening of a resident’s bank account, amongst many other things. Generally a resident’s account has fewer charges at lower rates. It can be very useful to get the NIE card before one makes landfall. One can apply for the card at the ones local Spanish embassy, but this can only be done after one has a social security number. The queues in Spain can be long, and it is more efficient to do this chore outside of the country.It’s important to check what tax treaties and negations ones home country has with Spain and the European Union. This is predominantly to ensure that one is not double taxed at any point. Income taxes must be paid for any year that the resident spends 183 days in the country. There is a 25% flat tax available for expats for the first five years one is in the country. This can be useful since for citizens, it’s only the lowest income bracket that is taxed on an equitable basis. If one is working for a company, then the company usually deducts the tax from ones salary. If one is freelancing or running a business, then it is worth hiring a tax assessor to help navigate the complex Spanish system, and one must register as an autonomo with the local government,
If one is a non-European, it is important to keep all receipts, as Value Added Tax is paid back when one leaves the country or the Euro zone. If one has stayed there a while this could be a hefty sum.
