Banking, Money and Taxes in Spain
Expats moving to Spain will find that managing finances is not so much a pain as it is a pocket burner. 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 organizing 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.
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 for 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. 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, but resident accounts tend to offer more services, have higher interest rates and lower commissions.
The name for current account in Spanish is cuenta corriente and a savings account is cuenta de ahorro.
Spain's official currency is the Euro (EUR). One Euro is divided into 100 cents. Money can be changed at major hotels or bureaux de change, but banks generally provide better rates. All major credit cards and travellers cheques are widely accepted at most hotels, restaurants, and shops.
Do note that the Spanish separate large figures into thousands with a “.” rather than a “,”.
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 extranjero (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.
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 for 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. 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, but resident accounts tend to offer more services, have higher interest rates and lower commissions.
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)
- 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
- Residents also need to produce their Foreigner's Identification Number and certificate (Número de Identificación de Extranjeros or NIE)
- Confirmation of address (utility bill, driving licence or council tax bill; proof of address must have been issued within the last 3 months)
The name for current account in Spanish is cuenta corriente and a savings account is cuenta de ahorro.
Money in Spain
Spain's official currency is the Euro (EUR). One Euro is divided into 100 cents. Money can be changed at major hotels or bureaux de change, but banks generally provide better rates. All major credit cards and travellers cheques are widely accepted at most hotels, restaurants, and shops.
Do note that the Spanish separate large figures into thousands with a “.” rather than a “,”.
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 extranjero (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.
