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Welcome to the European Tax Blog.

Some of Europe's brightest legal minds look at the tax issues across Europe which could impact multinational businesses.

| 2 minutes read

Still thinking of moving to Spain to bask in the sun, while benefiting from our special tax regime for expats? Well, your time has finally come!

You may recall that back in that glorious summer of 2021, when the pandemic restrictions were beginning to be lifted, we tried to entice you into moving to Spain to enjoy our weather and special tax regime for expats, which was about to undergo significant changes following a recently published bill (Anteproyecto de Ley de fomento del ecosistema de las empresas emergentes).

As the months gradually passed and our silence became increasingly deafening, many of you probably lost hope. Some of you even texted or called us, as you feared that “no news is good news” wasn’t the case here... But fret not! We are delighted to inform you that the bill has finally been approved, so you can start benefiting from the new special tax regime from 1 January 2023. As the old Spanish saying goes, las cosas de palacio van despacio, which loosely translates as “red tape makes you wait”.

Let’s look at the main changes (most of them beneficial, others less so).

First, non-residents now qualify for the regime if they have not been tax resident in Spain during the past five tax years (as opposed to the previous ten-year requirement). The proposal to extend the regime from 6 to 11 years (including the year in which the residency change happens) has unfortunately not made it through, so it only applies for shorter stays.

But that’s all the bad news we have for you really, as the final wording confirms that the expat’s spouse and children under the age of 25 will also benefit from the special regime, albeit subject to some conditions. A new requirement has been added, whereby (in summary) they cannot earn more than the expat who is eligible to apply the regime (probably to avoid an ineligible expat from applying the regime through his or her spouse). Also bear in mind that the spouse and children cannot have lived in Spain in the past five years.

The most noteworthy changes relate to the reasons for moving to Spain that qualify one to apply the regime. Previously you could only apply the special tax regime if you were posted to Spain, obtained new employment in Spain or were appointed as a director of a Spanish company. Now you can also benefit from the regime if you are a remote worker and decide to move to Spain (i.e. not because of a specific job posting), you are a freelancer who will work in the start-up sector, or you are a highly qualified professional providing services to a start-up or innovative company that pays you at least 40% of your total income from employment or other economic activities. So freelancers can now also benefit from the special tax regime. Income from their economic activities and employment (including income obtained abroad) will be taxed at a 24% rate up to EUR 600,000, and above that at 47%.

People who are appointed as directors of a Spanish company are no longer disqualified from the regime if they hold a 25% stake in the company, unless the Spanish company is an asset-holding company (sociedad patrimonial).

That’s all for now, but we will be back soon to update you on other very interesting changes to this law. In the meantime, we will let you revel in this good news if you were thinking of moving to Spain. If you do, don’t forget to let us know!


uriamenendez, spanish tax, expats, income tax