Banking, Money and Taxes in Spain

Expats moving to Spain will find that managing finances 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 other countries in the European Union (EU).

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.  

Picture of Bank tellers for banking in spain page

Banking in Spain

Spain has one of the highest bank branches per capita on the continent and most offer online banking with fast, easy transfers; Solbank and Bancaja cater specifically to British citizens.

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 are notoriously high in Spain and the variety of charges one might encounter are set-up fees, debit card transaction fees, correspondence fees (when the bank communicates with you) and money transfer fees for transfers between accounts. Most banks charge a small sum for opening the account, but nothing substantial.

There are also quite a few international banks that offer services in English, and allow free transfers from alternate branches around the world, as well as multi-currency accounts. Halifax and Barclays are two recommended options that Britons moving to Spain should strongly consider. Each requires an annual maintenance fee of less than €100.

Expats can either open a resident or non-resident bank account. 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 Número de Identificación de Extranjeros (NIE).

Requirements to open a bank account in Spain

  • Applicants must be aged 18 or over
  • Photographic proof of identity (passport or National Identity Card from the country of origin for each of the applicants)
  • Residents also need to produce their Foreigner's Identification Number and certificate (Número de Identificación de Extranjeros or NIE)
Some banks may also ask you to provide:
  • Confirmation of address (utility bill, driving licence or council tax bill; proof of address must have been issued within the last 3 months)
  • Proof of occupation or status (employment contract/payslip, letter from accountant/lawyer, pension or disability payment confirmation, student card). This is an extra requirement introduced in 2007 by the Bank of Spain as a measure to combat money laundering
Banks in Spain open from Monday to Friday 8.30am to 2pm and, in the winter, on Saturday mornings from 9am to 1pm or Thursday afternoons, from 5pm to 7pm. Automated Teller Machines (ATMs) are plentiful.

The name for current account in Spanish is cuenta corriente and a savings account is cuenta de ahorro.

Money in Spain

Since 1999, Spain, like all other EU member-states, has used the euro (€) as its official currency.  One euro is divided into 100 cents.
  • Notes: €5, €10, €20, €50, €100, €200 and €500.
  • Coins: €2 and €1, then 50, 20, 10, 5, 2 and 1 cents
Do note that the Spanish separate large figures into thousands with a “.” rather than a “,”.

ATMs (cajeros automáticos) are ubiquitious, and normally accept foreign cards. Expats 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.

All kinds of debit and credit cards are widely accepted in Spain; though, if using an international credit card or debit card, transaction charges will apply.

Taxes in Spain

It’s important to check what tax treaties and negations one’s home country has with Spain and the European Union. This is to ensure that one is not 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 you become a formal Spanish tax resident and you are liable to be taxed for your offshore and international assets and accounts as well as those within the country.

You will need a Número de Identificación de Extranjeros (NIE), which can be obtained at the local police station, in order to be identified by the taxman.

If freelancing or running a business, one must register as an autonomo with the local government. It is worth hiring a tax assessor to help navigate the complex Spanish system.

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 lived in Spain for a while this could be a hefty sum.

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