U.S. Expat Tax Guide: Americans Living in Spain (Filing in 2026)

Over 50,000 Americans have chosen Spain’s sunshine, rich culture, and exceptional quality of life as their home. While you must file taxes in both countries, the combination of the U.S.-Spain tax treaty, Foreign Earned Income Exclusion, and Foreign Tax Credit typically eliminate any U.S. tax liability entirely. The challenge isn’t paying double taxes; it’s filing correctly and knowing which protections to use.

Spain uses a January 1 to December 31 tax year (same as the U.S.), which simplifies filing compared to countries with different tax years. But with proper planning and the right strategy, most Americans in Spain breathe easy knowing they won’t owe anything to the IRS when filing correctly. Spain’s progressive tax system means you’re often paying more in Spanish taxes than you would in the U.S., which creates foreign tax credits that eliminate most U.S. tax liability.

Why Do I Have to File Taxes in Both Countries?

As a U.S. citizen or green card holder, you’re required to file U.S. taxes regardless of where you live. The U.S. uses citizenship-based taxation, meaning your tax obligations follow your passport, not your residence. This applies whether you’re working in Madrid, retired in Valencia, running a business in Barcelona, or a dual citizen who’s lived in Spain your entire life.

Spain determines tax residency using clear, objective criteria. You’re considered a Spanish tax resident if you meet any of these:

The Three Spanish Residency Tests:

183-Day Rule: You spend more than 183 days in Spain during a calendar year (includes arrival/departure days, weekends, holidays)
Economic Interests Test: Your primary economic or professional activities are based in Spain, regardless of days spent
Family Ties Presumption: Your spouse (not legally separated) and minor children permanently reside in Spain (presumed resident unless proven otherwise)

Spanish tax residents pay taxes on worldwide income at progressive rates from 19% to 47%, plus autonomous community (regional) variations.

Non-residents pay taxes only on Spanish-source income at a flat rate of 24% (or 19% for EU/EEA citizens).

The key insight? Your U.S. filing obligation continues regardless of your Spanish residency status. But the tax treaty and exclusions work together to prevent you from paying taxes twice on the same income.

Not sure how to juggle Spanish taxes and your U.S. return?

Most Americans in Spain still need to file annually with the IRS—even if they pay high Spanish taxes. Our expat CPAs help you apply the Foreign Tax Credit correctly so you avoid double taxation and stay fully compliant.

How Do the U.S. Tax Exclusions and Credits Protect Me?

Two main protections eliminate most U.S. tax liability for Americans in Spain.

Foreign Earned Income Exclusion (FEIE)

The FEIE allows you to exclude up to $130,000 of foreign earned income for the 2025 tax year (filed in 2026) from U.S. taxation. This works particularly well for Americans earning moderate incomes in Spain.

To qualify, you must meet either:

Physical Presence Test: Present in foreign countries for 330+ days in any 12-month period
Bona Fide Residence Test: Genuine resident of Spain with intent to remain indefinitely

Example 1: Marketing Manager in Barcelona Using FEIE

Annual salary: €75,000 (approximately $82,000)
FEIE exclusion applied: $82,000 (full amount excluded)
U.S. tax owed: $0

The FEIE works well when your Spanish income falls below the exclusion threshold. But what about higher earners?

Foreign Tax Credit (FTC)

The Foreign Tax Credit provides a dollar-for-dollar credit against U.S. taxes for income taxes paid to Spain. This is powerful because Spanish tax rates are often higher than U.S. rates, especially when you consider Spain’s top rate of 47%.

Example 2: Executive in Madrid Using FTC

Annual income: €200,000 ($218,800)
Spanish taxes paid: €76,000 ($83,100)
U.S. taxes before credit: $52,000
Foreign Tax Credit applied: $52,000
U.S. tax owed: $0
Excess credit: $31,100 (can carry forward up to 10 years)

Many expats benefit from strategically combining both the FEIE and FTC. Use the exclusion for earned income up to $130,000 and credits for investment income or amounts above the exclusion threshold. An experienced expat tax professional can help you determine the optimal strategy for your situation.

What Are Spain’s Tax Rates and How Do They Compare?

Spain uses a progressive tax system where you pay different rates on different portions of your income.

Spanish Resident Tax Rates (2025 Tax Year)

Taxable Income (EUR)	Tax Rate	Taxable Income (USD)
€0 – €12,450	19%	$0 – $13,600
€12,450 – €20,200	24%	$13,600 – $22,100
€20,200 – €35,200	30%	$22,100 – $38,500
€35,200 – €60,000	37%	$38,500 – $65,600
€60,000 – €300,000	45%	$65,600 – $328,000
Over €300,000	47%	Over $328,000

Note: These are general rates combining national and regional portions. Each autonomous community (Comunidad Autónoma) can adjust regional rates, so your actual rate depends on where you live. Madrid and Andalusia tend to have the most favorable rates, while Catalonia and Valencia have slightly higher rates.

Spanish Savings Income Tax Rates (2025 Tax Year)

Spain taxes investment income (dividends, interest, capital gains) separately:

€0 – €6,000: 19%
€6,000 – €50,000: 21%
€50,000 – €200,000: 23%
€200,000 – €300,000: 27%
Over €300,000: 30% (increased from 28% in 2024)

U.S. Federal Tax Rates (2025 Tax Year)

Taxable Income (Single)	Tax Rate	Taxable Income (Married Filing Jointly)	Tax Rate
$0 – $11,925	10%	$0 – $23,850	10%
$11,925 – $48,475	12%	$23,850 – $96,950	12%
$48,475 – $103,350	22%	$96,950 – $206,700	22%
$103,350 – $197,300	24%	$206,700 – $394,600	24%
$197,300 – $250,525	32%	$394,600 – $501,050	32%
$250,525 – $626,350	35%	$501,050 – $751,600	35%
Over $626,350	37%	Over $751,600	37%

Key Comparison Insights

Because Spain’s rates (especially at higher income levels) are often higher than U.S. rates, most expats find that the Foreign Tax Credit works best for eliminating U.S. tax liability. For those with moderate incomes below $130,000, the FEIE provides maximum benefit.

Important

Spain’s tax year runs from January 1 to December 31 (same as the U.S.), which simplifies record-keeping compared to countries with different tax years. However, Spain’s filing period runs from April 1 to June 30 for the previous year, while the U.S. extends your deadline to June 15 automatically.

What Is Spain’s Special Tax Regime (Beckham Law)?

Spain offers an attractive special tax regime officially known as the “Special Regime for Workers Posted to Spanish Territory” but commonly called the “Beckham Law” after footballer David Beckham, one of its first prominent beneficiaries.

How the Beckham Law Works

This regime allows qualifying individuals to be taxed as non-residents for Spanish tax purposes while living in Spain. You pay a flat 24% rate on Spanish-source income up to €600,000 (about $656,000) annually, with 47% applying to amounts above that threshold. Foreign income remains completely exempt from Spanish taxation.

Key Benefits:

Simplified 24% flat tax rate instead of progressive rates up to 47%
No Spanish tax on foreign income (dividends, interest, rental income abroad)
No Spanish wealth tax on foreign assets
Exemption from certain complex Spanish reporting requirements
Applies for up to six consecutive tax years

Qualification Requirements

To qualify for the Beckham Law in 2026:

Haven’t been a Spanish tax resident in the previous 5 years (reduced from 10 years in 2023)
Relocate to Spain for employment, executive appointment, or qualified remote work
Apply within 6 months of Spanish Social Security registration using Modelo 149
Work primarily in Spain (maximum 15% of work can be conducted abroad)
Don’t own more than 25% of a Spanish company (unless under startup provisions)

Who Qualifies:

Employees transferred to Spain by foreign or Spanish companies
Remote workers with digital nomad visas working for foreign employers
Executives appointed to Spanish company boards
Entrepreneurs running qualified startup activities (with ENISA approval)

Who Doesn’t Qualify:

Professional athletes (excluded since 2015)
Freelancers and self-employed without digital nomad visa status
Majority owners of Spanish businesses (over 25% ownership)

How Do I File Taxes in Spain?

The Spanish Tax Filing Process

Spain uses a sophisticated online filing system through the Agencia Tributaria (Spanish Tax Agency). The ATO manages all tax collection and provides online tools for individuals.

Spanish Tax Year: January 1 to December 31
Filing Period: April 1 to June 30 of the following year
Required System: Renta Web (accessed through Agencia Tributaria portal)

Setting Up Your Spanish Tax Filing System

To file your Spanish taxes, you need your NIE (foreign identification number) and access to the online portal.

Quick Setup Process:

Obtain NIE: Required for all financial activities in Spain
Digital Certificate or Cl@ve PIN: Authentication methods for accessing tax portal
Access Renta Web: Log into Agencia Tributaria using your credentials

Filing Your Return with Renta Web

The Spanish system automatically pre-fills most information (borrador) from employers, banks, and financial institutions.

Filing Process:

Access Renta Web through Agencia Tributaria portal
Review pre-filled data (borrador) carefully
Add missing information like deductions or foreign income
Verify all income sources and tax payments
Calculate estimate and review
Submit your completed return
Payment options: Pay in full by June 30 or split (60% June, 40% November)

Important

You’re responsible for accuracy of the borrador, even if pre-filled by the tax agency.

Alternative Filing Methods

Tax Advisor (Gestor):

Many expats prefer using a gestor or tax advisor, especially with complex situations involving:

International income sources
Beckham Law status
Investment properties
Capital gains
Business income

Benefits of using a tax advisor:

Expert handling of dual country filing
Professional review of Beckham Law eligibility
Assistance with Agencia Tributaria queries
Proper foreign tax credit calculations

U.S. Tax Filing from Spain

U.S. Tax Year: January 1 to December 31
Filing Deadline: June 15 (automatic two-month extension for expats)
Extension Available: October 15 (with Form 4868)
Payment Deadline: April 15 (even with filing extension)

Required Forms:

Form 1040: U.S. Individual Income Tax Return
Form 2555: Foreign Earned Income (for FEIE)
Form 1116: Foreign Tax Credit (for FTC)
FinCEN Form 114 (FBAR): Report of Foreign Bank and Financial Accounts (if accounts exceed $10,000)
Form 8938 (FATCA): Statement of Specified Foreign Financial Assets (if thresholds met)

While you get extra time to file, any taxes owed are still due by April 15 to avoid interest charges. Most Americans in Spain owe nothing, but it’s crucial to file on time to avoid penalties.

What Common Scenarios Should I Know About?

Scenario 1: Corporate Expat in Madrid

Situation: American working for a multinational company on assignment, €95,000 salary, company-provided housing valued at €18,000

Tax Strategy:

Use FEIE to exclude entire salary and housing: $104,000 + $19,700
Spanish taxes paid create backup Foreign Tax Credit if needed
Result: $0 U.S. tax owed
Key consideration: Employer benefits and housing allowances must be properly reported on both returns

Scenario 2: Self-Employed Consultant in Barcelona

Situation: American freelance consultant (autónomo), €140,000 income, serving international clients

Tax Strategy:

Use FEIE for first $130,000 of income
Remaining $23,000 taxable in U.S.
Spanish taxes paid create Foreign Tax Credit
Self-employment tax applies: $3,500 on amount above FEIE
Result: $3,500 U.S. tax owed (self-employment tax only)
Important note: U.S.-Spain totalization agreement may exempt self-employment tax

Scenario 3: Retiree Couple in Valencia

Situation: Retired American couple, $45,000 U.S. Social Security, $60,000 from 401(k), €15,000 Spanish rental property income

Tax Strategy:

U.S. Social Security: Not taxed in Spain per tax treaty
401(k) distributions: Taxed in both countries, use FTC
Spanish rental income: Taxed in Spain first, credited against U.S.
Spanish taxes paid: €18,100 ($19,800)
U.S. tax before credits: $12,500
Foreign Tax Credit: $12,500
Result: $0 U.S. tax owed

Scenario 4: Digital Nomad with Beckham Law

Situation: American with digital nomad visa, €180,000 salary plus €30,000 U.S. investment income

Tax Strategy:

Spanish tax (Beckham Law): €43,200 ($47,300) at 24% on salary only
U.S. investment income: Not taxed by Spain
Uses FEIE for first $130,000 salary
Remaining income subject to U.S. tax with FTC
Result: $0 U.S. tax owed
Annual Spanish tax savings: €38,700 ($42,300) with Beckham Law vs. regular rates

What Are My Filing Requirements and Deadlines?

Requirement	Spain	United States
Tax Year	January 1 – December 31	January 1 – December 31
Filing Period	April 1 – June 30	June 15 (automatic extension for expats)
Payment Deadline	June 30 (or split: 60%/40%)	April 15 (even with filing extension)
FBAR Deadline	N/A	April 15 (automatic extension to October 15)
Extension Available	No (fixed filing period)	October 15 (Form 4868)
Online Filing	Mandatory (Renta Web)	Available through IRS or tax software

FBAR Filing Requirement: If your combined Spanish bank accounts and other financial accounts exceed $10,000 at any point during the year, you must file FBAR electronically.

FATCA Filing Requirement: Americans living abroad must file Form 8938 if specified foreign financial assets exceed:

$200,000 on the last day of the tax year, OR
$300,000 at any time during the year (For married filing jointly, these thresholds double to $400,000/$600,000)

Pro Tip

Keep quarterly statements for all Spanish accounts. Since Spain and the U.S. use the same tax year (January-December), year-end statements work perfectly for preparing both returns, simplifying your record-keeping.

What Common Mistakes Should I Avoid?

Mistake 1: Not Tracking Days for Physical Presence Test

Many Americans assume living in Spain automatically qualifies them for FEIE. The Physical Presence Test requires 330 full days in foreign countries during any 12-month period. One extra trip to the U.S. can disqualify you for the entire year.

How to avoid it: Maintain a detailed calendar tracking every day’s location. Consider using apps specifically designed for expat day counting. If you travel frequently to the U.S., the Bona Fide Residence Test might provide more reliable qualification.

Mistake 2: Missing FBAR Requirements

Spanish bank accounts, investment accounts, and certain financial products all count toward the $10,000 FBAR threshold. The penalties for non-compliance are severe: up to $10,000 per violation for non-willful failures, and much higher for willful violations.

How to avoid it: Track all foreign financial accounts throughout the year, including:

Spanish bank accounts
Investment and brokerage accounts
Life insurance policies with cash value
Any accounts where you have signature authority (even if not yours)

Mistake 3: Incorrect Beckham Law Application Timing

The Beckham Law application must be filed within 6 months of Spanish Social Security registration. Missing this deadline permanently disqualifies you from the regime for that move to Spain.

How to avoid it: Consult with a Spanish tax advisor before relocating to Spain. Prepare documentation in advance and file Modelo 149 immediately upon establishing Spanish residency. Consider engaging professional help to ensure proper application.

Mistake 4: Ignoring Modelo 720 Requirements

Spanish tax residents must report foreign assets exceeding €50,000 in any of three categories: bank accounts, securities/investments, or real estate. Penalties for non-compliance historically were severe, though reduced after a 2022 court ruling.

How to avoid it: File Modelo 720 between January 1 and March 31 following the year you become a Spanish tax resident if you meet reporting thresholds. Include all U.S. bank accounts, brokerage accounts, retirement accounts (401(k), IRA), and real estate. The €50,000 threshold applies separately to each category.

Mistake 5: Misunderstanding Autonomous Community Variations

Spain’s autonomous communities (regional governments) set their own income tax rates. Moving from Madrid (lower rates) to Catalonia (higher rates) can significantly impact your tax liability without changing your income.

How to avoid it: Research regional tax rates before choosing where to establish Spanish residence. Madrid, Andalusia, and Galicia typically offer the most favorable rates for middle and high earners. Consider tax implications alongside cost of living when selecting your Spanish home base.

What Tax Treaty Benefits Apply?

U.S.-Spain Income Tax Treaty

The comprehensive tax treaty between the U.S. and Spain provides several key benefits:

Eliminates double taxation on most types of income
Provides clarity on which country has primary taxing rights
Reduces withholding rates on dividends, interest, and royalties
Includes tie-breaker rules for dual residency situations
Special provisions for pensions, government service, and students

Key Treaty Provisions:

Dividends: 15% maximum withholding (lower than statutory rates)
Interest: 10% maximum withholding
Royalties: 8% for copyrights and films, 10% for other intellectual property
Pensions: Generally taxed only in country of residence
Government Service: Specific rules for government employees

The Savings Clause: The treaty includes a “savings clause” that preserves the U.S. government’s right to tax its citizens as if the treaty didn’t exist. This means U.S. citizens must still report and pay U.S. taxes on their worldwide income, though the treaty prevents double taxation through credits and exclusions.

Totalization Agreement

The U.S.-Spain totalization agreement prevents double social security taxation and helps coordinate benefits.

Key Rules:

For U.S. company assignments:

Assignments under 5 years: Pay into U.S. Social Security system
Assignments over 5 years: Pay into Spanish Social Security system
Certificate of Coverage required to prove exemption from other country’s system

For Spanish employers:

You pay into the Spanish Social Security system
Exempt from U.S. Social Security on this employment

For self-employed Americans in Spain:

Self-employed individuals residing in Spain are generally exempt from U.S. self-employment tax
You pay into Spanish autónomo (self-employed) Social Security system
Must obtain Certificate of Coverage from Spanish authorities to prove exemption

Benefits Coordination:

Credits from both countries can count toward minimum requirements
Must have at least 6 quarters (1.5 years) of U.S. work for totalization
Each country pays proportional benefits based on actual work performed

Pro Tip

The totalization agreement is particularly valuable for self-employed expats (autónomos), who otherwise would pay into both systems. The exemption from U.S. self-employment tax can save thousands annually on income earned while living in Spain.

What Other Considerations Should I Know About?

U.S. State Tax Obligations

Moving to Spain doesn’t automatically eliminate your U.S. state tax obligations. Some states (particularly California, Virginia, New York, South Carolina, and New Mexico) have “sticky” tax residency rules that may continue to claim you as a resident even after you move abroad.

If you maintain ties to your former state (property ownership, driver’s license, bank accounts, voter registration), you may still owe state taxes on your Spanish income. Learn more in our guide on state taxation for expats.

Example: Maria earns $85,000 in Spain and pays $25,000 in Spanish taxes. For federal purposes, she excludes her entire salary using the FEIE and owes $0. But if California still considers her a resident, she owes California tax on the full $85,000 with no credit for Spanish taxes paid (approximately $4,800 annually).

Properly sever state tax ties before moving abroad to avoid this costly mistake.

Building Credit in Spain

Spain doesn’t use the U.S. credit score system. Instead, Spanish banks rely on several factors when evaluating creditworthiness. As our guide on credit scores in other countries explains, Spain primarily uses the CIRBE (Central de Información de Riesgos del Banco de España) system.

CIRBE System: The Bank of Spain’s central credit register tracks all loans and credit products exceeding €9,000. This system shows your borrowing history but doesn’t generate a single numerical score like FICO.

To establish Spanish credit:

Open a Spanish bank account and establish regular activity
Request a small credit card with low limit (tarjeta de crédito)
Set up direct debits (domiciliación) for utilities and bills
Maintain consistent employment with Spanish payroll deposits
File Spanish tax returns demonstrating stable income
Build history over 1-2 years before major purchases

Timeline Expectations: Building sufficient credit history in Spain typically requires 1-2 years of consistent banking activity and employment history. Mortgage approval often requires a minimum 2-year employment history in Spain.

For Employed Workers:

Your Spanish employer withholds social security contributions from your gross salary. For 2025, the combined employer and employee contribution rate is approximately 36.25% of gross salary, with the employee portion around 6.35%.

Spanish social security coverage includes:

Healthcare: Full access to Spanish public healthcare system
Retirement Pension: Contributions toward Spanish state pension
Unemployment Benefits: Prestación por desempleo (if meeting contribution requirements)
Temporary Disability: Coverage for illness or injury
Maternity/Paternity Leave: Generous paid leave for parents

For Self-Employed (Autónomos):

Monthly social security contributions are required regardless of income level. Autónomo rates for 2025:

New autónomos: Reduced rates for first 1-2 years (tarifa plana reducida, starting around €80/month)
Established autónomos: Contributions based on chosen base, typically €230-€500/month

The 2023 reforms tied autónomo contributions more closely to actual income levels, creating a more progressive system.

Private Healthcare:

While Spain’s public healthcare is excellent, many American expats also maintain private health insurance (seguro médico privado) for shorter wait times, English-speaking doctors, and broader network choice. Popular providers include Sanitas, Adeslas, and ASISA, with plans costing €50-€150 per month.

What Are My Next Steps?

If you’re planning your move to Spain:

Understand Spanish residency rules before establishing ties
Research Beckham Law eligibility if earning above €60,000 annually
Consider timing of significant financial transactions around your move
Set up proper record-keeping systems for dual-country filing
Determine whether you’ll maintain U.S. state tax obligations
Research autonomous community tax rates for your preferred Spanish location

If you’re already living in Spain:

Determine your Spanish tax residency status
Evaluate whether FEIE or FTC provides better tax benefits for your situation
Ensure compliance with FBAR and FATCA reporting
Consider Beckham Law application if recently relocated
Track travel dates carefully if using Physical Presence Test
Keep quarterly statements for all financial accounts
File Modelo 720 if foreign assets exceed €50,000 thresholds

If you’re behind on filings:

Don’t panic. Streamlined procedures can help you catch up with minimal penalties
Gather Spanish tax returns (declaraciones de renta) systematically
Document income sources and Spanish taxes paid
Start with the most recent three years (typically required for streamlined filing)
Consider voluntary disclosure programs for optimal outcomes

Living as an American expat in Spain offers incredible lifestyle benefits, from world-class culture and cuisine to excellent healthcare and beautiful weather year-round. With proper tax planning and compliance, you can focus on enjoying Spain’s rich history and vibrant communities without worrying about your tax obligations.

The key is staying informed, planning ahead, and getting professional help when needed. Spain’s higher tax rates combined with U.S. expat provisions and the tax treaty typically result in fair overall tax treatment that won’t derail your Spanish adventure.

Need Help with U.S. Expat Taxes in Spain?

Whether you’re just moving to Spain, have been there for years, or are behind on filings, we can help. No matter how late, messy, or complex your return may be, you’ll have peace of mind knowing that your taxes were done right.

Don’t just guess. Get the best advice from one of our expat expert CPAs and EAs. Whether you need tax advice to prepare for a move abroad, to navigate Beckham Law complexities, or to catch up on late filings, Greenback can help. Consults upfront can help avoid costly mistakes and stress later.

If you’re ready to be matched with a Greenback accountant, click the Get Started button below. For general questions on US expat taxes or working with Greenback, contact our Customer Champions.

Ready for peace of mind with your U.S. taxes while living in Spain?

From Spanish payroll income to autónomo earnings, pensions, and foreign accounts, we make sure your U.S. filing is accurate, optimized, and stress-free. Get matched with a Greenback accountant today.

This article is for informational purposes only and should not be considered tax advice. Tax situations vary greatly, and you should consult with a qualified tax professional for advice specific to your circumstances.

Essential Resources for Americans in Spain

Spanish Government Resources

Agencia Tributaria Main Website – Official tax authority
Personal Income Tax (IRPF) Information – Income tax details
Beckham Law Special Regime – Article 93 impatriates regime
Renta Web Online Filing – Lodge your return online

U.S. Government Resources

U.S.-Spain Totalization Agreement Pamphlet – Complete agreement details
Agreement Full Text – Legal document

Greenback Tax Resources

Spain-Specific Guides:

Spain Beckham Law Explained – Comprehensive Beckham Law guide

General Expat Tax Guides:

Foreign Earned Income Exclusion Guide – FEIE details and strategies
Foreign Tax Credit Guide – FTC maximization
FBAR Filing Guide – Foreign bank account reporting
FATCA Reporting – Form 8938 requirements
Streamlined Filing Procedures – Catching up on late returns
Physical Presence Test – Qualifying for FEIE
Bona Fide Residence Test – Alternative FEIE qualification

Additional Resources:

State Taxation for Expats – Severing state tax ties
Totalization Agreements Guide – Social security coordination
Credit Scores in Other Countries – Building Spanish credit
U.S. Citizen Abroad Taxes – Overview of expat obligations
U.S. Tax Treaty Overview – Understanding tax treaties

Free Guide 15 Tax Tips Every American Expat Needs To Know in 2025

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