SPAIN

•If you are living and working in

Spain, you will be liable to pay
taxes in Spain on your income and
assets and will need to file
a Spanish tax return. Whether you
pay Spanish taxes on your
worldwide income, or Spanish-
based income only, depends on
your residency status.
•If you are classed an official
resident in Spain you will be
subject to Spanish tax on your
worldwide income, calculated on a
progressive scale, although tax
deductions exist. If you are a non-
resident in Spain you will only pay
tax in Spain on Spanish income –
typically at a flat rate
Types of Tax in Spain
1. Direct Taxes
2. Indirect Tax
Direct Taxes
Direct tax in Spain are as follows:
Individual Income Tax (IRPF)
Corporation Tax (IS)
Capital Gains Tax
Non-Resident Income Tax
Inheritance and Donation Tax
Indirect tax
Indirect tax in Spain are as follows:
Value Added Tax (IVA)
Special Taxes
Insurance Premium Tax
Excise
 Residence rules of Spain

For the purposes of taxation, how is an individual

defined as a resident of Spain?
•He/she remains in Spain for more than 183 days in a
given calendar year
•His/her business or economic interests are directly or
indirectly located within Spanish territory.

TAX FOR NON RESIDENTS:

If you live in Spain for less than six months (183 days),
you are classed as a non-resident and will only be
taxed on the income earned in Spain. Your income is
taxed at flat rates with no allowances or deductions.
 Tax Base Progressive rates from 19%
to 45%
From EUR 0 to 12,450 19%

From EUR 12,450 to 20,200 24%

From EUR 20,200 to 35,200 30%

From EUR 35,200 to 60,000 37%

From EUR 60,000 45%

Savings tax A 19% tax is levied on savings income up to

EUR 6,000, 21% tax on savings income
between EUR 6,000 and EUR 50,000 and a 23%
tax on savings income over EUR 50,000.

Spanish taxes for non-residents

The general flat income tax rate for non-residents is 24%,
or 19% if you are a citizen of an EU/EEA state.
Dual taxation agreements

Spain has signed many treaties with other countries to avoid double
taxation (ie. paying tax in your home country and in Spain). The Spanish
tax authority (Agencia Tributaria) maintains an up-to-date list of
treaties.
Capital gains tax in Spain

Spain’s capital gains tax (the tax paid on profits from selling property
or other investments) is charged as follows:

1. First €6,000 – 19%

2. €6,000-€50,000 – 21%
3. €50,000+ – 23%
Special Spanish tax for foreigners working on assignment
Special tax regime for foreigners coming to work in Spain on an
employment contract with a Spanish company.
‘Beckham’s Law’ as it was allegedly set up so that footballer David
Beckham
Under the regime, you are only taxed in Spain on Spanish income at a rate
of 24% up to earnings of €600,000. For more than €600,000, you’ll be
charged at 45%.
Spanish tax deductions and allowances
A basic personal allowance for everyone under the age of 65 is set at €5,550, or
€6,700 from age 65 and €8,100 from age 75.
If you have children under 25 living with you, you can claim an additional
allowance of:
€2,400 for the first child
€2,700 for the second
€4,000 for the third
Additional allowance of €2,800 for each child under three years.
If you have a parent or grandparent living with you and your total income is less
than €8,000, you can claim an allowance of €1,150 if they are over 65 and €2,550
if they are over 75.
Amount of money obtained by
the State through taxes, in
Spain.(in millions of Euros)
Kind of tax 2014 2015 2016 2017 2018
Income tax 72.829 71.835 64.235 70.619 72.662
V.A.T 57.432 48.042 33.219 49.086 56.174
Corporate tax 44.712 27.323 20.096 16.611 21.435
Excises 20.252 20.060 19.806 19.073 19.104

Total 195,225 167,257 137,356 155,389 169,375

 UAE
Introduction:
Speaking about the feature of the tax system of Dubai, the UAE, it is necessary to say that the
system of taxation in Dubai,
the UAE, completely eliminates the direct taxation of the residents, and the government
revenues are derived from the indirect taxation.

The following taxes are charged in Dubai, the United Arab Emirates: Type of Indirect
Taxes

o Corporate taxes;
o Value-added tax;
o Capital-gains tax.

Consumption Taxes

 Nature of the Tax - VAT - Standard Rate-In January 2018, a VAT started to be implemented
in the UAE at a rate of 5%.

Reduced Tax Rate ,Food items, health, education, petroleum products, social services and
bicycles are VAT exempt. The financial services and (residential) real estate sectors are also
Other Consumption Taxes
 Excise duties were introduced in 2017 for three types of products:
Carbonated beverages (50%), Tobacco (100%), Energy drinks (100%)

Individual Taxes- Tax Base For Residents and Non-Residents -No personal tax is levied.
Tax Rate
No personal tax is levied. 0%
Most Emirates impose a rental tax. Residential tenants pay 5% of annual rent
and commercial tenants pay 10% of annual
rent in Dubai. Expat tenants pay 3% of
annual rent whereas UAE citizens do not pay
any rental tax in Abu Dhabi. All tenants pay
2% of annual rent as rental tax in Sharjah.

Municipalities also impose tax on Varies from Emirate to Emirate: Tourist

services. It is deducted on the services of
restaurants and hotels.
Real property tax
facilities may charge 10% tax on the room
rate, 10% on service charge and 10% on
municipality fees. Facilities may also charge a
city tax (ranging from 6 to 10%) and 6%
tourism fee.
A transfer charge is levied on the transfer of
real estate in the UAE (4% in the Emirate of
Dubai and 2% in the Emirate of Abu Dhabi)
Corporate tax

 Each emirate has its own laws on corporate taxes for companies operating within the
emirate, reality taxes are imposed only on the following entities:
Foreign gas or oil producing companies dealing in oil or hydrocarbon production within
UAE.

Income Tax

 The UAE Federal Government does not impose taxes on the wealth of
companies and individuals in the UAE.

 However, if you are earning an income in Dubai, but are a tax resident of
another country, you may be liable to declare your income and pay taxation on
it.
For example, if you are a tax resident of the UK and you own a property in Dubai
that you earn a rental
income from, you are required to declare this income on your British tax returns
and may potentially have to pay tax on it, subject to certain conditions
Sales tax
 Alcohol in Dubai attracts 30% sales tax (or none if you buy it illegally - one
reason why many do)
 Hotel services and entertainment attract a 5%
 Municipality tax ie rooms, food, other services. Restaurants often add a
service charge of 5-15%.

Corporation Tax

 Oil companies are subject to 55% tax rate in Dubai and 50% in other
emirates, in addition to royalties.

Customs Duty

 General import duty is 10% on luxury goods, and 4% on everything else.

That includes goods shipped out of
UAE .
Residential Status of UAE
 Purchase of real estate
In case of purchase of residential property in Dubai or any other Emirate with
value over one million dirhams,
you may obtain residence permit in the UAE. In such event the validity of
residence visa is 2 years.

 Entering into employment contract

If you are planning to get employed officially in Dubai or other Emirates, you
need working / employment visa.

 Incorporation of your own company in the United Arab Emirates.

This is the most convenient and efficient option for obtaining business visas in
the UAE.
It takes only a few weeks to obtain visa and the expenses incurred are relatively
low. Moreover,
it is not necessary for a company to perform real activity – its business may be
purely formal.