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MOVING TO SPAIN

Reader question: Can I be a non-resident for tax purposes with Spain’s non-lucrative visa?

The non-lucrative visa is one of the most sought-after methods third country nationals such as Americans, Chinese and now UK nationals use to be able to spend more than 90 days at a time in Spain. But does it involve having to become a tax resident?

Published: 19 July 2021 17:49 CEST
Updated: 6 November 2023 07:55 CET
Reader question: Can I be a non-resident for tax purposes with Spain's non-lucrative visa?
If you remain longer than 183 days in Spain, you are officially considered a tax resident. Photo: Selim Cetin/Pexels

Spain’s visado no lucrativo – colloquially referred to as the retirement visa in English-speaking spheres – is the preferred means for non-EU nationals with sufficient savings/income to get around the 90 out of 180 days rule. 

As the name suggests, your time and business in Spain has to be non-lucrative, so it’s not for people who intend to study, invest or work, but rather those who have the financial means to take care of themselves and their families, as well as their health costs. 

READ MORE: What you need to know about applying for Spain’s non-lucrative visa

So if you’re not working in Spain, surely you don’t need to pay taxes in Spain, right?

Surprisingly for some perhaps, you actually do. Spain’s non-lucrative visa is a residency visa, so you have to spend more than 183 days in the country for it to remain valid, especially if you want to renew it after the first year (the first visa lasts one year, the next two renewals last two, and after five years you can apply for a long-term visa). 

If you remain longer than 183 days in Spain, you are officially considered a tax resident.

Therefore, you have to pay income tax on your worldwide income and you should check if there are double taxation agreements between your country and Spain. 

If you buy a property in Spain, and especially if you let it out for part of the year, you will also be subject to tax. 

READ ALSO: What are the pros and cons of Spain’s non-lucrative visa?

It’s true that you could technically use this visa to spend more than 90 consecutive days but fewer than 183 and therefore not be considered a tax resident, but this isn’t a scheme that will necessarily work out for you in the long run. 

Keep in mind that Spanish migration officials will have a record of your visas and they may question why you keep having to reapply for the non-lucrative visa from scratch. 

If you want to spend more than 90 consecutive days in Spain without becoming a tax resident, Spain’s golden visa may be a better option for you, if you can afford it. 

This usually involves buying a property worth at least €500,000, and if you spend less than six months in Spain you will only have to pay taxes on your assets in Spain and won’t lose your residency either given your sizable investment (you’ll have to visit Spain at least once a year). 

However, spend more than half a year in Spain or have the main core of your economic activities in Spain and you will be subject to paying tax on your worldwide assets and income.

READ ALSO: How to make the most of Spain’s Golden Visa residency scheme

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For members

HEALTH

Are private health costs tax deductible in Spain?

Many expenses can be offset against taxes in Spain, but what about private health insurance and other medical costs? Can you deduct them in 'la declaración de la renta' (annual tax return)? It often depends on your circumstances and location.

Published: 2 May 2024 09:13 CEST
Are private health costs tax deductible in Spain?

Taxes are expensive in Spain, so anything that you can do to be able to make deductions or offset payments can help.

Not many people are aware that some private health costs such as health insurance can be tax deductible in Spain.

There are however certain requirements you must meet to be able to do this. It is generally only available to:

  • Self-employed workers registered as autónomo
  • Employed workers who have private medical insurance paid for by their companies
  • Companies that offer group health insurance to their employees.

This means that if you’re an employee who wants to get their own private medical insurance, unfortunately, you generally won’t be able to claim the payments back against tax.

READ ALSO – La Renta: What items can you deduct on your Spanish tax return?

Self-employed

If you run your own business or work for several different clients and are registered as autónomo in Spain, then you are able to deduct private health insurance.

Of course, you’ll already be covered by the public health system as you’ll be paying social security, but you may want to consider private health insurance too. The benefits include being able to get appointments faster and see specialists when you want.

Even though health insurance may be not completely necessary for carrying out your work, Law 35/2006 on Personal Income Tax states that it is deductible for self-employed people, provided they pay taxes through the direct estimation regime, which takes into account real annual income.  

It’s also possible to deduct private health insurance policies of your spouse and any children under 25 years old, as long as they live with you.  

  • You can deduct a maximum of €500 for each person in the family who meets these requirements, or a maximum of €1,500 if any of those people suffer from a disability.
  • Your total deduction for private health insurance as a family cannot exceed €4,500.  

It’s important to be careful when you’re taking out a private health insurance policy that you’re taking out the correct one for your circumstances, otherwise, you may not be able to claim it back. For example, if you want to be able to deduct your Sanitas expenses you have to take out the Sanitas Professional Plan only, you can’t pick and choose which you want. This means that if you want to be able to put this down as an expense you must communicate your intentions and situation with your chosen insurer first, so that they can advise you.  

READ ALSO: Record 850,000 people waiting to have an operation in Spain 

Employees who get private health insurance from their company  

If your company pays your private health insurance for you, it is considered to be a type of remuneration, but you are exempt from declaring it as work income, so are able to generate some tax savings on it.  

The limit is also €500 for each person included in the health insurance coverage. If the health insurance premiums exceed €500 per year, the rest will be taxed as a type of income.  

If you pay a portion of the health insurance yourself and your company pays the rest, you are also allowed to deduct these expenses.  

Tax-deductible medical expenses in the Canary Islands, Cantabria and Valencia

If you live in either the Canary Islands, Cantabria or Valencia, there are a set of special circumstances that allow you to offset health expenses against your taxes, no matter whether you’re self-employed or if your company pays private health insurance for you or not.  

Canary Islands  

It’s possible to deduct 12 percent of expenses and fees paid during the year for medical or health reasons including the prevention, diagnosis and treatment of diseases, dental health, pregnancy and childbirth, accidents and disability.  

Operations for aesthetic purposes are excluded unless they are intended to repair damage caused by accidents or are treatments aimed at helping those dealing with sexual identity.

It’s also possible to deduct 12 percent of the expenses paid for medical devices that compensate for physical deficiencies, such as glasses or hearing aids. 

The total amount deductible is €600 per year for individuals and €840 if joint a declaration is filed. If the taxpayer has a disability equal to or greater than 65 percent, an additional €100 deduction is added.

READ ALSO: Is it better to do a joint or separate tax declaration if you’re a couple in Spain?

Cantabria

If you live in Cantabria you are able to deduct 10 percent of private health services for illness, dental health, pregnancy, childbirth, accidents and disability. You can either claim it for yourself or your immediate family who live with you.  

The limit is €500 for individuals and €700 for joint declaration. These limits will be increased by €100 for those with a disability equal to or greater than 65 percent, and by a further €100 for each taxpayer with this disability, in the case of a joint declaration. 

Valencia

This year, the government of Valencia has also included a deduction for certain health expenses.

€100 can be deducted for the treatment and care of people affected by highly complex chronic diseases and “rare” diseases, as well as €100 for care for those diagnosed with acquired brain damage or Alzheimer’s disease. This will be extended to €150 for single-parent families.  

You can also deduct 30 percent of the expenses for:

  • Services and treatments linked to non-aesthetic oral health, with a maximum limit of €150.
  • Services related to mental health, with a maximum limit of €150.
  • Prescription glasses, contact lenses and cleaning solutions, with a maximum limit of €100.

Remember that if you live in any of these three regions and you want to be able to offset your medical expenses against taxes, you will need to pay with card and have proper invoices and receipts to prove what you have paid for.  

If you are unsure about what expenses you can claim, it’s best to contact your gestor or another tax professional to check about your specific situation beforehand. 

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