Despite the recent political interlude whereby Catalonia declares independence, Spain remains a favourite destination whether for vacation or settlement. Spain is a place where you can eat well, laugh wholeheartedly, relax and enjoy the energetic, passionate culture. It is no wonder why so many people, noticeably the Northern European, seek a second citizenship in Spain.
Since Spain is a member state to the European Union, it is fairly straightforward for European citizens to immigrate to Spain. Upon arrival in the country, one is required to register with the local authorities by providing, amongst other things, evidence of sufficient recurring income and health insurance.
At present, Spain does not have any special immigration scheme in favour of the non EU-nationals. As a result, a non-EU national who desires to immigrate to Spain is required to go through the typical immigration channels by obtaining a visa for employment or economic activities.
Spanish residents are taxed on their worldwide income on a progressive rate up to 45%, with certain variations between autonomous communities. Savings income benefits from reduced rates up to 23%. Foreign taxes paid on income abroad can in most cases be credited from the Spanish taxation due.
Spain does levy a wealth tax. This is an annual tax, payable on the total net value of your worldwide assets. The federal rates range from 0.2% to 2.5%. A tax free allowance of €700,000 applies, increased by up to €300,000 depending on the value of the family home. Notwithstanding the generality of the foregoing, there are variations between autonomous communities, as well as limitations based on the annual income.
Spain applies the European Succession Regulations, which stipulate that the courts of the state where the deceased had his/her habitual residence at the time of death will be competent to rule on the succession. The applicable law determines how the estate shall be divided upon death, taking into account general rules on forced heirship etc. The Spanish inheritance law acknowledges reserved shares for certain heirs. Depending on your preference, you may wish to apply the inheritance law of your state of nationality to govern the succession of your estate.
Spain does apply inheritance tax. The rates and exemptions differ from region to region. However, some general principles apply. The application of inheritance taxes is linked to the residency of the testator. When the heirs are non-residents of Spain, they will only pay inheritance tax on the Spanish goods that they acquire. When the heirs are also Spanish residents, inheritance tax is due on the worldwide estate that is acquired.