Latest news with #TaxAgency
Local Spain
26-05-2025
- Business
- Local Spain
What Spain's self-employed should know about getting paid through Bizum
Some self-employed people (autónomos) in Spain heavily rely on getting paid through Bizum, an app, which allows you to make payments or request money from a phone number, if you have a Spanish account number from a bank linked to it. Bizum has over 20 million users in Spain and is how many Spaniards choose to split the bill, pay small amounts for services and even pay their rent. If you get paid part of your income through Bizum, however, you should already know that you have to be careful because it has certain limits and conditions when it comes to paying taxes in Spain. This means that payments are recorded in the same way as other banks, so you must make sure you're declaring any income you receive through the app, including gifts from family and friends. Up until now, only amounts over €3,000 were recorded and sent to the Tax Agency, but starting in January 2026, the authorities will begin receiving detailed data every month on all transactions carried out by freelancers and small businesses through Bizum and other payment platforms, regardless of the amount of each transaction. From this date onwards platforms must submit the identification of the professional or company receiving payments, the merchant number, the sales terminals used, whether or not they are in Spain, the monthly amount billed, the type of payment method and payment destination. This means that any amount, no matter how small, will be reported to the Treasury from next year. This cross-referencing will allow the Tax Agency to verify the amount of income compared to your tax returns and detect small amounts of undeclared income, as well as the large amounts, like the current situation. Under declaring is in fact common for small businesses in Spain and something that the government are intent on fighting against, so you have to be extra careful and make sure you declare everything correctly. Stats show the underground economy represents about 15.8 percent of Spain's GDP. This all means that from next year the situation will become very complicated for autónomos because if you use Bizum for your business, but you also use it with friends and family, there will be very little distinction between the two. For example, if a friend pays you back via Bizum for a coffee you bought them or you buy tickets for a group of friends to go to the cinema and they each pay you back individually, it will look as though you've received income. You obviously won't have reported these amounts as income on your quarterly tax return because they're not – it's just friends paying you back for money they owe you. With this new reform, Bizum will go from being an app for transfers between friends into another tool for tax audits and increase the Tax Agency's control over the self-employed. If you do work for yourself and use Bizum to collect payments for services or sales, all professional income received through Bizum and similar platforms must be declared along with the corresponding VAT. Occasional payments between individuals for do not require a declaration if they do not exceed €10,000 per year and are not for commercial purposes. This is the same with reimbursements between friends or family, as long as they are not professional income. It may however, be confusing for both you and for the Tax Agency to distinguish between the two and decide which are reimbursements and which is income from clients or customers, therefore, you must learn to identify and classify the transactions in order to differentiate between personal and professional income. Professional income from Bizum must be accompanied by a corresponding invoice and be taxed like any other income from work. This means it's essential to keep records, invoices, and receipts for payments received via Bizum. Your bank should also allow you to view and download your Bizum transaction history to help. Failure to declare taxable income can result in fines ranging from €3,000 for a minor infraction, as well as a surcharge of up to 50 percent of the amount that was not paid. For a serious offence when undeclared income exceeds €3,000 there could also be a surcharge of between 50 and 100 percent of the amount that was not declared. Finally, for very serious offences you will be fined 150 percent of the amount not declared. It is considered a tax crime if the amount defrauded exceeds €120,000. Our journalists at The Local are not tax experts, we learned the hard way by reading laws and rules, and speaking with experts. If you're unsure about how to declare any payments or which payments you should declare it's important to contact a tax professional in order to advise you.
Local Spain
21-05-2025
- Business
- Local Spain
What to do if you're facing a tax inspection in Spain
Typically, a tax inspection is prompted by a specific incident or if you run a business that is under the Spanish tax agency's scrutiny for fraud control. This includes sectors where you often receive cash payments rather than bank transfers. You may also be targeted if you regularly receive VAT back from the authorities rather than having to pay more or if you're under Spain's Beckham Law tax regime. Unfortunately, these are both true for many foreigners here who work for companies abroad. If you do receive a letter from Hacienda's tax inspection unit, it's important to read the document carefully to understand all the implications. The letter will detail the reason for the inspection, the years they are inspecting and the information required, as well as the deadline for responding. It's very important to make sure you respond by the deadline or you could face fines. The first step is to start organising all your documentation which includes invoices, receipts, tax returns, statements from your bank etc. Ensure that everything is up to date and store them all together so you can find them all in one place. In Spain, you are obliged to keep all your documents and receipts for a period of six years, because inspections can go back this far. Secondly, you should go over all your numbers and calculations to make sure that everything is correct and there aren't any errors. If you have a gestor, you may want to contact them too to check all the calculations they've submitted are correct, as they can make mistakes too. Prepare you answers in case you have to justify certain expenses for your business, large cash transactions etc. If you don't have a gestor or accountant, you may want to contact one as they can help you prepare and anticipate what questions and information the Tax Agency will need. Occasionally inspectors may come to your place of work to conduct an on-site inspection, but they will only be able to do this if it's a place open to the public such as a café. If you work from home, they will have to have an administrative or court order if they need to inspect anything in person. Once you have got everything in order you will usually send your evidence digitally or in the post, without having to go in person. Sometimes, however, you may have to go in for an interviewing or questioning. The Treasury will notify you of the outcome within a certain amount of time and will let you know if everything is correct, if they need any more information or if you owed more money. It's important to answer any questions they have confidently and to stay calm, so you can show them you're on top of the situation. They will send you settlement with a result to be paid and typically offer a reduction if you accept it without filing any objections. If you do feel that the result is wrong, however, you can file an appeal. Be aware though, that this could result in a penalty fine. Once everything has been finalised and paid, it's essential that you keep all documentation organised and easily accessible in case they contact you again in the future. This means keeping all records of correspondence with the Tax Agency and the final result.
Local Spain
13-05-2025
- Business
- Local Spain
FACT CHECK: No, Spain does not fine you for withdrawing €3,000
There have been several posts doing the rounds on X and Facebook claiming that the Spanish tax authorities will fine you for trying to withdraw €3,000 or more from your bank. Some posts have even gotten up to 20,000 likes each and were shared more than 5,000 times. Take this post, for example: 'If you wish to withdraw more than €3,000 in cash, you must notify the Tax Agency at least 24 hours in advance of the withdrawal. You must also specify the purpose of the withdrawal. Failure to comply with this requirement may result in fines of up to €150,000'. A false X post claiming that Spain will fine you for withdrawing €3,000. There have even been some very misleading headlines in the Spanish press such as in right-wing OK Diario ,which wrote 'Fine of up to €150,000 for withdrawing cash from an ATM', or in the widely read 20Minutos newspaper, which wrote 'Up to €150,000: these are the fines imposed by the Treasury for unjustified withdrawals or deposits of money from the bank'. These posts are categorically not true, the tax authorities won't fine you for withdrawing €3000 from the bank. Here's where the confusion comes in. What does happen is that banks are obliged to report any transactions above €3,000, whether that's deposited or taken out. This is to help fight against tax fraud and money laundering. The law specifically states bank communication with Hacienda "must include information on deposits, withdrawals of funds and collections, when the amount exceeds €3,000'. You can read the full law here. This is nothing new. This law came into force back in 2010 and it hasn't been amended since. So while your bank may inform Spanish tax authorities if you withdraw more than €3,000 from the branch, it is not necessary that you justify it and you will definitely not be fined €150,000. The truth is that no bank in Spain will even let you withdraw more than €3,000 in one go from an ATM. Bank ATMs have a limit that varies depending on the institution. For example, Ibercaja has a daily ATM limit of €1,000, while Banco Santander's limit is €600 and BBVA has a limit of €2,000. If you do want more than €3,000 in cash, you will have to go to your local branch and do the withdrawal over the counter with a bank teller. This is so they can have a record of it to send to the Tax Agency. As CaixaBank's blog explains: "There is no legal limit for withdrawing money from an ATM, although if you want to withdraw more than €3,000 at once, you will need to speak to a bank employee and prepare a receipt, which will be sent to both the Tax Agency and the Bank of Spain'. You must however make sure that you file all your tax declarations accurately and include all your necessary transactions correctly, otherwise you could be fined for tax fraud, but not simply for withdrawing money.
Local Spain
31-03-2025
- Business
- Local Spain
EXPLAINED: Who has to do a tax declaration in Spain in 2025?
The Spanish tax season is almost upon us, beginning on April 2nd and ending on June 30th, meaning that you have to file your income taxes between these dates. Personal income tax is known as IRPF in Spain (Impuesto sobre la Renta de las Personas Físicas) and the annual income tax return is called la declaración de la renta. This year you must report any income you earned during the previous financial year, which was 2024. The Spanish tax year is the same as the calendar year, unlike in the UK for example where it runs from April to April. The general rule is that anyone who lives in or stays in Spain for more than 183 days a year is considered to be a tax resident and must fill out the annual income tax form. 'If you stay in Spain for more than 183 days during the calendar year," you are usually considered a tax resident here states Spain's Tax Agency (Agencia Tributaria). If you have a complicated situation where you split your time between two or more countries, or if you have property or a business in other countries, there are international tax treaties, which state where you should be considered a resident and where you need to declare your income for tax purposes. In this case it would be best to hire a tax expert to guide you. Those who are classed as a tax resident in Spain will be subject to pay tax on their worldwide income, which includes income from rental properties overseas for example. Article 96 of the Personal Income Tax (IRPF) regulations establishes that all taxpayers must file a tax return, but there are certain exceptions. Generally, if you are resident in Spain you will have to complete la declaración de la renta if you meet the following requirements: You received more than €22,000 annually from a single employer. You had multiple employers, but your income from the second or subsequent ones exceeded €1,500 annually. You earned more than €15,876 from two or more employers, if the second employer paid you more than €1,500 annually. Individuals with capital income and capital gains subject to withholding or advance payment exceeding €1,600 per year. Autonómos or self-employed workers who were registered as such at any point in 2024. Even if they made a loss. Taxpayers with real estate income, non-withholding capital gains from Treasury Bills, subsidies for the purchase of social housing, and other public aid exceeding €1,000 per year. Those who received the Ingreso Mínimo Vital (IMV) or Minimum Vital Income in 2024, as well as members of their household. Those who want to request refunds such as deductions for maternity, large families, or disability, as well as deductions for withholdings and instalment payments. Taxpayers who applied for the transitional deduction regime for investment in housing, for international double taxation, or those who have made contributions to protected assets of people with disabilities, pension plans, dependency insurance, among other social security instruments. Those who exclusively earned gross income from exclusively from capital or economic activities, as well as capital gains exceeding €1,000 per year and capital losses of more than €500.
Local Spain
26-03-2025
- Business
- Local Spain
Do I have to register as self-employed in Spain if I rent to tourists?
You're a resident in Spain and you're lucky enough to own two properties. You meet all the requirements to get a tourist licence and decide to rent out the second property to visitors. Or you have a tourist licence for the property you live in and you rent it out on Airbnb occasionally when you go away – do you have to register as self-employed in either of these situations? Renting property in Spain can be a lucrative business in Spain given the sheer number of tourists here each year, but it's important to keep in mind that the authorities are in some cases trying to reduce the number of private vacation rentals as in many places there are far too many. Therefore, the rules and requirements on being granted a tourist licence are changing rapidly. It's crucial to stay on top of such regulations and make sure you're doing everything correctly with your ayuntamiento or town hall. It can be tricky to know whether you should become-self employed when renting out accommodation, mostly because there are lot of different scenarios and several different factors involved. Furthermore, tourism regulations are the responsibility of each region, which is in charge of establishing its own vacation rental regulations, therefore rules are not the same throughout Spain. Generally, if you take the first scenario and you own two properties and regularly rent out one to tourists, then yes you should register in the autónomo system, because this is a regular ongoing activity. What's more, if it's regular, then most likely you are making above minimum wage, which in 2025 is €1,381 gross per month over 12 months. If this is your main source of income, you should definitely register as autónomo/a, and even if it's not but you're getting regular payments above minimum wage, you should also still register. Now let's take a look at the second scenario. This would be when you rent out your Spanish home (your habitual residence) to tourists only occasionally because you live in it the rest of the year. Let's say you rent it out four times per year. This would not be considered a regular business and therefore you should be exempt from having to register as self-employed. However, if you rent it out for a lot of money during these four times and this is your main source of income, then you should register. It's important to keep in mind that if you offer additional services to the property, such as food, laundry service or cleaning during a stay for example, then you will also have to pay a 10 percent VAT rate. Whether you regularly rent out or not, or have to register as self-employed, you still always need to declare these rentals to the Tax Agency. To do this, you are always required to register in the census using Modelos (Forms) 036 or 037. According to Spain's Tax Agency, the rental of flats or apartments for weekends or specific periods of time constitutes an activity under Section 861.1 of the First Section of the Tariffs, "Rental of Housing". This means that all homeowners who rent out their properties will have to include this income in their Personal Income Tax (IRPF), as this income must be declared as real estate capital. Failure to declare your income from these types of activities will depend on each specific case, but it could result in fines ranging anywhere from €2,000 to €150,000. Since 2024, platforms such as Airbnb are required by law to provide information about people who rent out their properties, so it will be very easy for Spanish authorities to find out if you are renting to tourists but not declaring income, or registering as autónomo when you should be.
