Jean Galea

Health, Wealth, Relationships, Wisdom

  • Start Here
  • Guides
    • Beginner’s Guide to Investing
    • Cryptocurrencies
    • Stocks
    • P2P Lending
    • Real Estate
  • Blog
  • My Story
  • Community
  • AI Consultancy
  • Search

Thoughts on Catalan Independence Ideology

Last updated: June 16, 20258 Comments

These are some of my thoughts on the Catalan independence movement.

The first version of this article was written in October 2019, when we experienced some pretty outrageous scenes in Barcelona due to the violent protests following the sentence handed out to the politicians who were behind the separatist movement that held a unilateral referendum and declared Catalunya independent from Spain in 2017.

As always, I speak from the heart and without any filter. My thoughts and feelings come from a place of neutrality seeking common sense. I do have many Catalan friends and have absolutely no problem with the population in general. I’ve even learned Catalan myself out of my own interest and have nothing against the language itself. I always welcome learning more languages, albeit with the right priorities. I love life in Barcelona, but think it could be better if these independence shenanigans were put to rest once and for all.

The historical basis for independence

Most separatists seem to think that in the past Spain conquered Catalonia and has since then kept it reigned in by the use of force in a fascist way. This is simply false.

Spain is the result of the merger of 3 Kingdoms: Castile, Aragon and Navarra. Only Navarra was conquered by force. Aragon included Catalonia, Aragon, Valencia and the Balearic Islands. The merger between the crowns of Castile and Aragon in the 1480s was voluntary and served the interests of both monarchies.

The only time in which a full-fledged invasion and conquest succeeded was at the end of the War of Spanish Succession, ending on 11th September 1714 when Barcelona fell to the combined armies of Castile and France, not Spain as such. The Kingdom of Spain as a totally unified juridical entity, as opposed to a composite monarchy, started to exist at that date so, technically, Spain could not have invaded Catalonia.

Secessionists talk endlessly about the events of 1714, when the detested Phillip V’s troops blasted Barcelona into submission at the end of the War of the Spanish Succession. Rarely if ever mentioned are the events of 1701 & 1705, when the very same Phillip V was welcomed into Barcelona and crowned King of Aragon & Count of Barcelona by Catalonia’s assembled representatives. The official State Bulletin of the Kingdom of Aragon published an Act of the coronation, in the Catalan language (incidentally, Phillip was numbered ‘IV’ instead of ‘V’, as the first of the Phillips was only king of Castille, never of Aragon). Five years later, in 1705, the same Catalan politicians decided to ignore their earlier oaths of loyalty to their king and instead transferred their loyalties to Archduke Charles, a Habsburg pretender. At the time it looked like a winning bet, but the war was eventually won by Phillip de Bourbon and Catalonia thus found itself on the losing side of the conflict. If they’d have remained loyal to Phillip all along, subsequent history might be very different and 1714 would never have happened.

Another wonderful, albeit false, legend related to 1714 has Barcelona’s chief executive authority (Rafael Casanova) defending the city to his last dying gasp as the Bourbon troops of Phillip V proceeded to break through the walls and mercilessly crush Catalan resistance. To this day, homage is paid to this peculiar hero every year on the date the city fell, 11/Sep., an act of obligatory participation by all leading Catalan politicians. In actual fact, the real R.C. deserted his post when it was clear the battle would be lost, and escaped the city disguised as a monk. He lived a further 29 years, practicing law a nearby town with the full knowledge of Madrid’s authorities, who granted him a cozy amnesty a few years later. He died in 1734.

The economic case for independence

Leaving the tales of history aside, perhaps a slightly more valid cause for claiming independence would be the economical abuse of Catalonia from the rest of Spain, and particularly Madrid. This is what many separatists keep repeating. They paint Catalonia as a paradise with hard-working people, economical and cultural riches. They claim that Spain is usurping all the good things from Catalonia for the benefit of Madrid and other regions in Spain. Let’s see if this holds up.

The number of cases of corruption is among the top 3 regions, with some of the worst scandals in recent history. During decades, the corrupted political rulers of Catalonia, exemplified by the former President’s family, the Pujols, have sacked the hard-earned taxes of Catalans and Spaniards, extorting businesses and industries who wanted to apply for regional projects. This system, known as «el tres por ciento» (literally, «the three percent») is now being prosecuted in courts of Law, exposing the dark side of corruption in Catalonia. The entire Pujol family, and many Catalonian politicians are being investigated, some having been sent to prison, in an embezzlement case of over €1 billion in total.

Spain is not robbing Catalonia. Madrid actually transfers more of its GDP to other less-developed regions in Spain that Catalonia does. At least for other regions have a higher per capita income than that of Catalonia, so there goes the myth of Catalans somehow being superior and more hard-working than the rest of the Spanish people.

A Madrid no la va mejor que a Cataluña porque es capital. Madrid fue siempre capital y a Cataluña siempre le iba mejor.

Madrid le ganó a Cataluña en PIB per capita por su actitud positiva hacia las inversiones y hacia las empresas.

— Martin Varsavsky (@martinvars) November 26, 2020

Catalonia also imposes the most and highest taxes amongst all Spanish regions. For example, wealth tax has been removed in Madrid, however it is still in force in Catalunya. Income taxes are also higher in Catalonia than in many other regions. They even introduced a tax on luxury items.

Catalonia, which has twice as many regional taxes when compared to the rest of the Spanish regions, ranks last in the Tax Foundation’s 2020 Spanish Regional Tax Competitiveness Index, a feat which they repeated in 2021. In 2020, a new tax on amenities with an environmental impact was ratified after the tax on the environmental hazard of radio-toxic elements was declared unconstitutional. Catalonia also reduced the inheritance tax credit and raised the marginal income tax rate by up to two points. Additionally, it has one of the worst-structured individual income and wealth taxes.

The mismanagement of the economic downturn by the Catalonian government, which focused more on the cause of independence than on the everyday-life problems of catalans, has had the effect of impoverishing Catalonia while other less affluent regions, like Madrid, Baleares, or the Basque region have grown strongly as Spain started recovering in 2015. In fact, Catalonia has been helped by the Central government to surmount its crisis. Now the Catalonian debt has a junk rating on it. All of this has been a serious blow on the self-esteem of Catalans in general, and to blame others has been the only way their regional Government has found to cope with it.

There is no real economic basis, therefore, and the Catalan separatist movement is not original at all, in fact, it is part of a global nationalistic and populist trend that we’ve been seeing in the past 10 years.

Is a Catalan state even possible?

The feasibility of an independent Catalan state is pretty much null, so the whole argument of whether Catalunya should be independent or not is a non-starter in my opinion. I understand that some Catalans think that they pay too much taxes to the Spanish state and don’t receive enough benefits, and that the region had its language and culture suppressed under the Franco regime, but that’s really as far as it goes. It’s not a reason to claim independence.

The situation we have now is purely the result of a few politicians manipulating a big mass of people into believing that most of their problems can be blamed on Madrid and Spain, and a Catalan independent state is the solution. For anyone who is economically literate and knows some basic history of Spain this is very obviously a false concept. Politicians in Catalunya over the past few decades have been as corrupt as they come, so I don’t understand why they blame the politicians in Madrid for any problems here in Catalunya.

The claim by the Catalan politicians that they have every right to make a referendum for self-determination is ridiculous. Self-determination referenda are not allowed by the Spanish Constitution, precisely because the subject of our sovereignty is the Spanish Nation as a whole. This is pretty logical.

I’ve lived through something similar when I lived in Malta. In the early 00s the nation was split right along the middle on the question of whether the country should join the European Union or not. For anyone with any sense the answer was obvious, however as usual the whole thing got politicised with the Labour party taking the No camp and the Nationalist party taking the Yes side.

The Labour party promised they would make Malta the new “Switzerland in the Mediterranean”, assuring that the tiny island did not need any help from Europe going forward, and that membership would only result in Sicilians invading Malta and the country losing much of its culture and charm. Luckily the referendum was won (with a very slight majority) by the Yes camp and so Malta eventually joined the European Union, adopted the Euro and is now doing very well as a country economically.

In Catalonia, the politicians promise that with independence, the region will become the new “Denmark of the South”. Funny how things repeat themselves. Both in Malta’s case and in Catalonia’s, these are absolutely false ideas that are simply non-starters and only serve to manipulate citizens.

Are Catalans Oppressed?

YouTube video

The Catalan separatists paint themselves as an oppressed nation. Anyone who has visited or lived in Catalunya knows that this can’t be further from the truth. I find it highly insulting to the people who are really living in oppressive situations around the world, starting from the Palestinians on the Gaza strip not too far away.

If anything, the non-separatist people living in Catalunya should be considered oppressed, since you have to be careful how you talk in public about this issue or you might get insulted or assaulted. I learned that the hard way when I first arrived to Barcelona when I went out with a Spanish national football team t-shirt (I was unaware of the conflict) and was shouted at and insulted until someone explained to me what the problem was. I still find the incident ridiculous and it’s just a perfect example of the non-pacific and non-tolerant nature of many separatists, who go to great lengths to paint themselves as pacific protestors and as the victims in this whole situation.

An old man bravely confronts the violent radicals
“Speak Catalan or emigrate.”
Scenes of destruction 19/10/19
Scenes of destruction 19/10/19
Scenes of destruction 19/10/19
Scenes of destruction 19/10/19
Indoctrination in schools
Father escapes from his apartment with baby in hands due to fears of smoke intoxication and extreme heat.
Photo montage illustrating the results of kids’ indoctrination.

Moreover, in all public schools, the Catalan language is given much more importance than Spanish. I don’t understand why a region that is so internationally involved would want to favor a little-used language in favor of Spanish, not to mention English. In fact, due to a rule barring anyone who doesn’t speak Catalan from a teaching position in public schools, most English teachers are actually Catalans with a limited knowledge of English and definitely no British or American accent, so people end up graduating with very basic to non-existent English skills.

I’ve had some people accuse me of spreading lies, insisting that both Spanish and English are taught in schools and students end up being trilingual or bilingual at worst. I’ll just leave a few links about that, judge for yourself:

  • https://elpais.com/espana/catalunya/2021-11-23/la-justicia-tumba-la-inmersion-linguistica-en-cataluna-pero-la-generalitat-pide-a-los-centros-que-no-hagan-ningun-cambio.html
  • https://elpais.com/espana/catalunya/2021-12-07/denunciados-por-amenazar-a-la-familia-que-pidio-el-25-de-lengua-castellana-en-la-escuela-para-su-hijo-de-cinco-anos.html

If you’re in Catalunya, just chat up any random teenager or young adult in English and see how well they speak the language. Those who do invariably have studied the language in private at one of the many private language centers in the city.

If you’re an expat with a family, you should seriously consider whether a move to Catalunya is right for you, unless you have the means to send your kids to international private schools. I know several expats who lament the fact that they didn’t plan around this factor, and now have kids whose first and main language is Catalan, which is the third or fourth language of their parents. This ends up limiting their interaction with their kids.

Having grown up in a school that taught me four different languages, I understand and value knowing more than one language, but you need to be practical in these matters. In Malta, natives speak Maltese between themselves, but would never dream of teaching academic subjects in Maltese or preferring it over the other national language; English. The reason is that English is simply vastly more useful in a globalized world. If you speak to parents who send their children to public schools, you will also hear stories of children being indoctrinated in Catalan culture over that of Spain or Europe, so there is a much higher chance of them growing up with a separatist mentality.

Catalan is also forcibly imposed on you in various ways. If you send any message to the authorities through their websites (like Generalitat.cat) in Spanish or English, you are likely to be responded to in Catalan. This happened to me more than once. Official letters are frequently only in Catalan, and the aforementioned Generalitat website curiously has a “bug” that changes the language to Catalan with every new page you visit, even after specifically using the language selector to select English or Spanish. Such impositions are not the right way to make non-Catalan speakers learn your language, but the use of force is the only way these people know. At the end of the day, very few people really want to learn Catalan unless they are forced to. There is simply no need for the language when Spanish is a much more useful language and we’re in Spain.

During this period of protests and violence, we have also seen universities being shut down by separatist students, preventing the rest of the students and teachers from entering their classes and proceeding with their education. Again, who is being oppressed here?

[Read more…]

Filed under: Expat life

How to Order Taxis with Child and Baby Car Seats in Barcelona

Last updated: July 01, 2021Leave a Comment

baby car seat barcelona taxi

When visiting or living in Barcelona with babies and young kids, you want to make sure to keep your little ones safe as well as not fall foul of the law.

In fact it is obligatory for kids and babies to travel in car seats when traveling by car.

Upon arrival at the El Prat Airport you will not find any taxis that have car seats. If you use a service like Cabify they will outright refuse to carry you as they don’t want to break the law and risk getting their driving license suspended.

Your only other alternative is to use the normal taxis, but again they won’t have any car seats. This means that you will be putting your little one in danger unnecessarily. You never know when disaster might strike, and you don’t want to be the one responsible because you didn’t plan ahead for something this simple.

Thankfully, I’ve found the perfect solution for all our movements within Barcelona and to and from the airport. The answer is to use a service called Blacklane. It’s a kind of premium taxi service whereby you can use their mobile application to order a taxi in advance with set pick up and drop off points.

Pries are in accordance with the service offered and the premium cars they use. The best thing is that I can put my mind at rest that they will provide a quality car seat that is in line with regulations and is clean and ready for my son to travel in safely.

Two other services you can use:

  • Taxibarcelona
  • Taxi baby seat BCN
  • Taxi adaptado

Filed under: Expat life

Living in Spain VS United States of America

Last updated: March 11, 202613 Comments

spain vs usa

After having visited the USA many times I have no doubts about wanting to live in Europe, although I enjoy visiting the U.S. from time to time. I have avoided writing about the topic on this blog since I never really had to think hard about it and weight the pros and cons of each; it was just clear to me which I preferred.

Growing up I like many other millions of people worldwide thought the U.S. was the ultimate place to be, but after visiting I saw that it is far from the idolized place that we see in movies.

Since I call Spain home these days, a tweet from entrepreneur Martin Varsavsky on Twitter caught my attention and I thought I’d repost his thoughts here for anyone interested in comparing Spain to the United States.

Of course, there are many other nuances one should consider, and I wouldn’t stay that Spain is better than the U.S. outright, but it’s good to know about the ways in which they differ and then make an informed decision on where you want to live. To the below I would also add that America is not as much of a free market as everyone believes. I see much more competition in many European countries when compared to the U.S.

Link to Tweet

Tweet content

Just landed in Madrid flying from San Francisco and traveling around the USA where I lived for 20 years and I frequently work. The San Francisco vs Madrid change makes me wonder.

  • Why are homeless people so rare in Madrid and so common in San Francisco when here GDP per capita is half?
  • Why is the murder rate 500% higher in California than in Spain?
  • Why is health care free even for tourists in Spain paid for by Spanish taxpayers as a human right and so incredibly expensive and cumbersome in California? Our son fell in the bathtub and we had a $12k bill for a few stitches at Stanford University emergency room.
  • Why are universities in Spain free and there is no student debt while in the USA there is more student debt than the GDP of Spain?
  • Why are there in the USA more people in jail/parole than there are inhabitants in Madrid the third largest city in Europe?
  • Why is litigation so common in the USA and so rare in Spain?
  • Why is inequality in the USA twice as high as that of Spain?
  • Why does Spain who borders Africa and has a much bigger illegal immigration problem than the USA provides amnesties for those who work for three years and USA separates parents from kids and conducts violent raids? Has 11 million hard working people who it refuses to legalize.
  • Why do people live 4 more years in Spain than US while Spain spends 70% less per person in health care?

Spain is not perfect, housing costs are high, good jobs are tougher to find, half of Catalonians want out, political corruption is unacceptable, universities produce no Nobel prizes.

But here cancer does not mean bankruptcy, pregnancies come with maternity leave, long vacations available to all, gun deaths, opium deaths are almost unheard of and in 09 when unemployment shot up crime surprisingly went down.

Spain has the fastest growing large economy of Europe. It is a welcoming democracy loved by the millions of foreigners who live here. Looking for an alternative country to live in? Consider Spain.

USA is amazing at solving intricate science and technology problems that no other country has solved but struggles at solving every day life challenges that all other developed nations have solved.

Raising Kids

North American living is many times a case of living in suburbia, and this contrasts quite sharply with European living in general. Here’s an interesting video contrasting North America and European cities when it comes to raising kids and letting them outside the house.

YouTube video

Other Considerations

There is no doubt that over the 60 years after the second world war, the USA could be considered as not only a superpower but the world’s most advanced nation in many respects, with many innovations arising there, as well as a sense of freedom and entrepreneurship that was unmatched anywhere else.

However the glory days are behind, and in my opinion, this country has been in decline in many ways for the past twenty years.

General John Grubb described seven stages that most empires go through:

  1. The age of outburst (or pioneers).
  2. The age of conquests.
  3. The age of commerce.
  4. The age of affluence.
  5. The age of intellect.
  6. The age of decadence.
  7. The age of decline and collapse.

I’m not sure exactly where I would place the USA, but my gut feeling is that it has crossed into the 7th stage of decline and collapse with all that’s happened there in the past 5 years. Europe might not be in an exciting phase, but it remains a place that is much richer in culture and diversity and in my opinion a way better place to live in. You also have the rise of Asia as a continent which has grown immensely in affluence, innovation and political clout.

If anything, I think that the USA is no longer the undisputed world leader, and now has to share the stage with the rest of the world. Its domination of world commerce through the dollar as the default currency is also at risk after the immense money printing that has occurred, and time will tell whether a basket of other currencies will take its place, or even something altogether new like Bitcoin.

Filed under: Expat life

How to Get the Best Deal on a New Car in Spain

Published: July 30, 2019Leave a Comment

When you are buying a new car it is essential to negotiate to get the best price possible. I used to hate this part as I don’t like negotiating. I prefer to know the real price of something and then decide for myself whether I can afford it or not.

Being in a foreign country and having to negotiate against experienced salesmen in a foreign language looked like a recipe for disaster to me.

Luckily I used the power of the internet to figure things out and I got a great deal.

Here’s how you can also get the best price on a new car in Spain.

First of all, be sure of which car you want and exactly which configuration. This is essential.

Second, find an online forum for that make and model. For example, in my case, I wanted to buy a Mazda so I found the Mazda forum in Spain and signed up.

Then, use Carnovo to get price quotations from several dealers in your area. Even though they’re supposed to be the best offers, they’re not, you can negotiate even more than that.

Your next step is to check the forum, typically other buyers will post their offers and the final price they managed to get from their dealers. Use those experiences to figure out the best price you can get for your car. You should now go to the dealer with a range of prices you are ready to accept, it’s wise to leave a leeway of €500.

So, if the original offer on Carnovo was say €29.000 and you know others on the forum have gotten it at €28.000, you can now go and tell the dealer straight up that you are interested in the car and ready to make a deposit right away, but you also know that the price should be €28.000 because your friends have gotten it at this price. Whatever he says, just keep insisting and be prepared to walk out if he doesn’t accept. Just make sure he has your contact details, even if he lets you walk out, he will call you in a few days to accept your offer.

That’s a brief guide to getting the best deal on a new car in Spain. Hope it helps!

Filed under: Expat life

Expat Guide to Spanish Taxation – Welcome to Europe’s Tax Hell

Last updated: March 11, 20268 Comments

One of the most common mistakes expats make is not researching the tax situation of their new country before they move there. This can lead to some very bad news further down the road.

Let’s have a look at Spain, which has a lot of taxes that people coming from other countries might not be familiar with. For example, having previously lived in Malta, many of the Spanish taxes were simply new to me and have no equivalent in Malta. There is no property tax, exit tax, or wealth tax there, just to mention a few examples.

Spain certainly seems to reward those who feed on government funds rather than encouraging people to set up businesses, invest, or save.

It’s important to understand this unfortunate fact before you move to Spain. I am definitely not a fan of the Spanish tax system, work culture, or politics, but there are also lifestyle benefits of living in Spain that you will have to weigh up.

Spain – Europe’s Tax Hell

Unfortunately, while Spain remains an amazing country with friendly people and all the ingredients to sustain an incredible lifestyle, it has been plagued by bad politics for several years now, and that has paved the way for the decline of this country.

Spain has a complex tax system where taxes are levied by the central, regional, and local governments. Stamp duties, transfer, wealth, and inheritance taxes are administered and regulated by 19 regional governments. Regional governments can also approve additional taxes and set the regional income tax brackets and rates, representing 50 percent of the overall income tax, while the other 50 percent is set by the central government.

Madrid is by far the best region tax-wise, while Catalonia sits on the opposite side of the spectrum. Madrid is the only region that does not levy wealth tax on its citizens — although as you’ll see below, the national government has since taken steps to make that advantage meaningless.

The truth is that wealth taxes never worked. When a region sets a higher wealth tax, taxpayers move out. It’s as simple as that. Others set up structures to avoid the tax. At the end of the day, even if wealth taxes worked, they would collect little revenue. At the same time, they disincentivize entrepreneurship, harming innovation and impacting long-term growth. With so many countries having abandoned the wealth tax, regions in Spain should repeal the tax instead of asking Madrid to harmonize with the rest.

The same is true for inheritance and gift taxes. They only raise 0.58 percent of Spain’s total revenue while they harm entrepreneurial activity, savings, and employment. In some cases, they have proven to be confiscatory. Regional statutory tax rates can reach levels as high as 81.6 percent, depending not only on the amount inherited but also on the pre-inheritance wealth of the inheritor and their familial closeness to the deceased. A recent study revealed that inheritances can in fact reduce wealth inequality, as transfers are proportionately larger relative to pre-inheritance wealth for households lower in the wealth distribution.

With that background in place, it’s time to get practical and look at the various questions and doubts foreigners have when dealing with the Spanish taxation system.

A Guide to Spanish Taxation

Let’s start with the basics. One of the first things to note is that taxation in Spain affects not only residents but also non-residents. The most classic example is tax on rental income from property one owns in Spain. Another point of confusion is how to determine whether you’re actually a resident or not for tax purposes.

Click here to get in touch with my tax advisors

Am I a tax resident in Spain?

In general terms, tax liability in Spain is determined by the concept of permanent residence, not citizenship. An individual is considered a permanent resident in Spain in any of the following circumstances:

  • You have spent more than 183 days in Spain within a single calendar year, regardless of whether you are formally registered.
  • Your primary professional activities are conducted in Spain — essentially if you are self- or otherwise employed in Spain.
  • Your main interests (e.g. your spouse or children who are still dependent on you) live in Spain.

Note that if the spouse and underage children reside permanently in Spain, your residence is presumed unless sufficient proof is provided to the contrary.

These criteria apply for personal income tax, wealth tax, inheritance tax, and gift tax, although for inheritance and gift tax some exceptions may apply.

What is the tax year-end?

December 31. Unless the taxpayer dies on a day other than December 31.

What do you need in order to submit the return?

You will need to obtain a digital certificate by filling in the form found here and going to the nearest office to verify your identity. Once verified, you will receive the digital certificate via email, which you will then need to install in your browser so that you can access the Hacienda website and fill in your tax forms.

If you are enlisting help from a tax consultant or accountant (which I recommend if it’s your first time), they will be able to submit all forms on your behalf. You will only need to provide information about your income and assets, a copy of your NIE, and answer any further questions to ascertain whether you can make use of certain tax deductions.

When are tax returns due?

The due date for filing the tax return and making a payment for tax residents and individuals taxed under the special expatriate regime is normally from April 6 to June 30 of each year for income obtained in the previous year.

Specific filing deadlines apply to non-residents. As a general rule, non-residents must report income and pay taxes on a quarterly basis (first 20 days of April, July, October, and January for income accrued in the previous quarter). Non-resident returns related to deemed income from holding real estate must be submitted by December 31 of the following year.

There is no possibility of claiming a filing extension. If the tax return is not filed on time, penalties will be imposed. These penalties vary depending on whether the return is filed late voluntarily or as a result of a tax inspection.

Income Tax (IRPF)

General Income Tax Rates

Spain’s personal income tax (IRPF — Impuesto sobre la Renta de las Personas Físicas) is split equally between the national government and your autonomous community. This means your total effective rate depends heavily on where you live.

The combined state + regional rates for the two most relevant regions for expats are as follows:

Madrid (lowest in Spain):

  • Up to €12,450: 19%
  • €12,451 – €20,200: 24%
  • €20,201 – €35,200: 30%
  • €35,201 – €60,000: 37%
  • €60,001 – €300,000: 43%
  • Over €300,000: 45%

Catalonia (among the highest in Spain):

Top marginal rates in Catalonia reach 50%, making it one of the most expensive regions in which to earn a high income. The bracket structure mirrors the national framework, but the regional surcharges push the combined rate significantly higher than Madrid across every band.

For reference, the Basque Country and Navarre operate under their own tax regimes (foral territories) and are not governed by the national IRPF framework.

Savings Income Tax Rates

Investment income — dividends, interest, and capital gains — is taxed separately from general income under the savings tax scale. This scale is national and does not vary by region.

As of January 1, 2025, the rates are:

  • Up to €6,000: 19%
  • €6,001 – €50,000: 21%
  • €50,001 – €200,000: 23%
  • €200,001 – €300,000: 27%
  • Over €300,000: 30%

The two new upper bands (27% and 30%) are worth noting. The 30% top rate replaced the previous ceiling of 28% and now applies to savings income exceeding €300,000. If you have substantial investment income or are planning a large asset sale, this matters.

Note that if the spouse and underage children reside permanently in Spain, your residence is presumed unless sufficient proof is provided to the contrary. The savings tax scale applies uniformly — a significant advantage over general income tax if you can structure your income around dividends and capital gains rather than salary.

Key Tax Forms and Obligations

Modelo 100

This is the declaración de la renta, the standard annual income tax return. Most residents need to file this every year. You will automatically receive a draft (borrador) from Hacienda, which you need to check and add to where necessary. Once correct, you submit it and either pay any balance owed or receive a refund for excess tax withheld (retenciones) during the year.

If you are married and file jointly, you benefit from an allowance of €3,400. You will only pay tax on earnings above €5,500 during the fiscal year. As a general rule, joint filing is advantageous when one spouse earns little or nothing.

You can use TaxDown to prepare your declaration, or if you need assistance in English, I can connect you with my tax advisor.

Modelo 720

Tax residents are obliged to declare the following assets and rights located outside Spain to the Tax Authorities:

  • Bank accounts in which the individual is the titleholder, representative, authorized person, or beneficiary, or over which they have disposal powers.
  • Securities, rights, insurance, and life or temporary annuities.
  • Real estate or rights over real estate.

There is no reporting obligation where the aggregate value of each category of assets is below €50,000. The filing deadline is January 1 to March 31 of the year following the one being reported.

Important update: In January 2022, the Court of Justice of the EU ruled that Spain’s original penalty regime for Modelo 720 was excessive and violated EU law. Penalties have since been reformed. The standard fine is now €20 per missing or incorrect data point, with a minimum of €300 and a maximum of €20,000 — and there is now a four-year statute of limitations. This is a significant improvement from the previous regime, under which penalties could reach 150% of the value of undeclared assets.

The form still exists and must still be filed. It is simply less of a sword of Damocles than it once was.

For more information, read my post about the Modelo 720 form in Spain.

Modelo 721 — Crypto Declaration

Since 2023, there is a separate declaration specifically for cryptocurrency assets held outside Spain: Modelo 721.

If you hold crypto on foreign exchanges or custodians and the total value exceeds €50,000 on December 31, you must file this form between January 1 and March 31 of the following year. The obligation is triggered by custody — who holds your private keys. Self-custodied wallets (where you control the private keys) fall outside the scope of the foreign reporting obligation, though you still pay income tax on any gains.

Modelo 721 is not a tax in itself. It is a disclosure obligation.

From 2026, the EU’s DAC8 directive requires all EU-based crypto service providers to automatically report client balances and transactions to tax authorities, who then share this data across member states. If what you declare in Modelo 721 does not match what the exchanges report, an automatic assessment will be generated. The days of anonymity in crypto are effectively over.

Penalties for non-filing are €200. For incorrect filing, €150.

ETE Form

Residents need to use this form to inform the Bank of Spain of economic transactions and balances of financial instruments held abroad that exceed €1 million at year-end. Any natural or legal person resident in Spain (other than payment service providers) whose aggregate financial balances and total transaction amounts exceed €1 million must submit this form.

Modelo D6

Another Bank of Spain form. Its purpose is to report marketable securities deposited abroad — fixed income, variable income securities, and collective investment holdings — even if the issuers are Spanish. The deadline is January 31 for positions of the preceding year. There is no minimum exempt threshold.

The D-6 must be filed when any of the following apply:

  1. The resident’s interest in share capital before or after the operation reaches 10%.
  2. The resident investor belongs to its governing body.
  3. The amount of the transaction exceeds €1,502,530.26.

Wealth Taxes

wealth tax spain

Spain has two overlapping wealth taxes. Yes, two. This was the outcome of the central government’s attempt to override Madrid’s longstanding decision to grant its residents a 100% wealth tax discount.

Impuesto sobre el Patrimonio (Regional Wealth Tax)

The regional wealth tax applies to both residents (on worldwide net assets) and non-residents (on Spanish-located assets). There is a general exemption of €700,000 per person, plus an additional €300,000 deduction for your primary residence if you are resident in Spain.

National framework rates range from 0.2% to 3.5%, but autonomous communities set their own rates. Madrid currently grants a 100% rebate, meaning Madrid residents pay zero regional wealth tax. Catalonia’s rates go up to 3.48%, with no such rebate.

Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF)

Introduced in 2023 as a supposedly temporary measure — and made permanent in 2025 — this national solidarity tax was designed specifically to circumvent Madrid’s and Andalusia’s wealth tax exemptions.

The ITSGF applies to net assets over €3 million (with the €700,000 personal allowance deducted, the effective threshold is approximately €3.7 million). Rates are:

  • 1.7% on net wealth between €3M and €5.35M
  • 2.1% on net wealth between €5.35M and €10.7M
  • 3.5% on net wealth above €10.7M

The mechanism is designed so that any regional wealth tax already paid is deducted from the ITSGF. In practice, this means residents of Catalonia and other regions that levy wealth tax largely offset the ITSGF through their existing payment. Madrid residents, who previously paid nothing, now pay the full ITSGF amount.

So much for regional autonomy.

This is another populist move dressed up as solidarity. High-net-worth individuals and entrepreneurs will do what they always do when confiscatory taxes are introduced: they will leave, restructure, or both. Wealth taxes have been scrapped across Europe precisely because they destroy more value than they collect.

Property Taxes

Property taxes are an important issue for expats in Spain. Spanish VAT (IVA), document fees, and sales transfer taxes are payable on purchase. Rates vary according to property type, value, and region.

Transfer tax of 6% is payable when purchasing a resale property, while a yearly local tax (IBI) is levied on real estate at up to 1.3% of the cadastral value, varying depending on the municipality and the category of real estate.

Capital Gains Tax

Capital gains tax (CGT) on the sale or transfer of qualifying assets is taxed under the savings income scale detailed above. As of 2025, rates run from 19% on the first €6,000 of gains up to 30% on gains exceeding €300,000. Exemptions are available depending on your personal circumstances. The scale is national and does not vary by region.

Inheritance Tax

Unlike many other countries, Spain levies inheritance tax even between close relatives. Regional rates and exemptions vary significantly — Andalusia, for example, has dramatically reduced its rates for direct family. For detailed information, I would suggest consulting a specialist, as the rules differ widely between regions and the amounts involved can be substantial.

Gift Tax

In Spain, you pay tax on any donations you receive while being a resident. Some regions have much lower rates — Andalusia being a notable example. Catalonia, predictably, is at the other end of the scale.

Exit Tax

Since January 1, 2015, Spain has levied an exit tax on individuals who have been permanent residents for at least ten years during the previous 15 years and cease to be residents. The tax applies to unrealized capital gains on shares or interests in any type of entity.

Taxation applies when either:

  • The total value held in those assets exceeds €4 million; or
  • The individual holds a stake of at least 25% in an entity and its value exceeds €1 million.

The unrealized gains are taxed at the savings income rates (currently 19%–30%).

If the change of residence is temporary and certain requirements are met, the tax due can be deferred for five years with a bank guarantee. If the taxpayer later reestablishes Spanish residence, they can claim a refund.

If the taxpayer moves to another EU/EEA country, the gain only needs to be declared and paid if the shares are sold within the next ten years or the taxpayer moves outside the EU/EEA.

Leaving Spain — Modelo 030

When you take up fiscal residence in another country after having been resident in Spain, you need to inform the Spanish tax authority. Obtain a certificate of tax residence from your new country to be safe if Hacienda later questions your departure.

The form to file is Modelo 030.

Special Tax Regimes for Expats

The Beckham Law (Régimen de Impatriados)

Spain’s so-called Beckham Law allows qualifying individuals who become tax residents in Spain to opt for a flat 24% rate on Spanish-sourced employment income up to €600,000 (income above that threshold is taxed at 47%), rather than the standard progressive IRPF scale. Foreign income is largely exempt, and wealth tax applies only to Spanish assets.

The regime is available for six years.

The Startup Law (Law 28/2022), which came into force on January 1, 2023, expanded the Beckham regime significantly:

  • The required prior non-residence period was reduced from 10 years to 5 years.
  • The window to apply after relocating was extended from 6 months to 12 months.
  • Eligibility was extended to new groups: digital nomads, innovative entrepreneurs, and highly qualified professionals.

Note that the Beckham Law does not apply to individuals who move to Spain to work as self-employed (autónomo). It is designed for employees and, under the Startup Law expansion, remote workers employed by foreign companies.

Digital Nomad Visa

Also introduced under the Startup Law in January 2023, Spain’s Digital Nomad Visa allows non-EU nationals who work remotely for foreign companies or clients to live legally in Spain for up to five years, with a path to permanent residency. Holders of the Digital Nomad Visa can apply for the Beckham Law tax regime, paying the flat 24% rate on income up to €600,000.

This is, in principle, a good development. In practice, the administrative process to obtain the visa remains cumbersome, as is the norm with Spanish bureaucracy.

Self-Employment (Autónomo)

self employed in spain

If you move to Spain and want to offer your own services — whether teaching, consulting, freelancing, or selling goods and services online — you will most likely need to register as self-employed (autónomo).

If you’ll be employed by a Spanish company, they will handle everything for you.

Another option is to open a company. This is more complex and only makes sense if you earn more than around €60,000 per year. At that level, corporate structures can result in meaningfully lower overall tax.

There are two other cases worth mentioning.

If you are a professional stock trader or otherwise operate in the markets as your main activity using your own capital, you do not need to register as self-employed. You will declare your profits and losses in your annual tax return and pay the corresponding savings income tax. You do not need to register as autónomo unless you are also managing other people’s money.

If you are an entrepreneur or investor who has moved to Spain to enjoy the lifestyle while a management team runs your company back home, the position is this: if you are genuinely retired and not providing services to anyone, you do not need to register as self-employed. You declare dividends and asset sales each year and that’s it.

If, however, you provide consultancy services to your company from time to time, or receive any remuneration for work performed — speaking engagements, advisory fees — you will need to register as autónomo and invoice accordingly.

These two income streams are taxed differently. General income (salary, consultancy fees) is taxed on the progressive IRPF scale, which goes up to 50% in Catalonia. Savings income (dividends, capital gains) is capped nationally at 30%. Structuring your income correctly makes a significant difference.

Social Security Contributions

Spain has a public health system and a state pension, and access to both requires paying social security contributions. Most self-employed entrepreneurs who want access to the public health system register as autónomo and charge their foreign companies a consultancy fee each month.

In 2023, Spain moved to an income-based social security contribution system for the self-employed, replacing the previous flat-rate model. Under the new system, monthly contributions are determined by your actual net income, split across 15 income brackets. The transition runs over nine years (2023–2031), with contributions gradually rising for higher earners.

For 2026, indicative monthly contributions range from approximately €217 for the lowest earners to around €590 or more for those earning over €6,000 per month. These figures are subject to parliamentary approval and annual revision. Higher earners will see the steepest increases as the system converges toward a contribution level proportional to income.

This ongoing reform is increasing the cost of being self-employed in Spain, particularly for those earning well. It is one more item on the list of reasons why Spain is not particularly friendly to entrepreneurs.

Cryptocurrency Taxes

Crypto is taxed as savings income in Spain, meaning gains from trading, selling, or exchanging cryptocurrency are subject to the savings income scale (19%–30% depending on the amount). Mining and staking rewards are treated as general income and subject to IRPF at your marginal rate.

Beyond income tax, there are two declaration obligations to be aware of:

  • Modelo 721 — for crypto held on foreign custodians exceeding €50,000 in value at year-end (see above).
  • Domestic crypto holdings above €50,000 will be covered by a separate domestic declaration obligation (Modelo 172/173), which requires crypto service providers operating in Spain to report customer balances and transactions to Hacienda.

Regional Tax Differences

Where you choose to live in Spain is a tax decision, not just a lifestyle one.

Madrid has the lowest overall tax burden: the lowest effective IRPF rates, a 100% wealth tax rebate (now offset by the national ITSGF for those over €3M), and generally favorable conditions for entrepreneurs.

Catalonia has the highest income tax rates in Spain, reaching 50% at the top bracket. Combined with a full wealth tax, it is by far the most expensive region for high earners.

Andalusia, the Valencian Community, and the Balearic Islands fall somewhere in between and have each made various changes to their wealth tax and inheritance tax treatment in recent years.

If you are a high-income individual or have substantial net worth and you have the flexibility to choose your region, run the numbers carefully before deciding.

Do You Need to Register as Self-Employed When You Move to Spain?

See the autónomo section above for a full breakdown. The short answer: it depends entirely on whether you are receiving income for services rendered, or purely living off investment and dividend income.

Click here to get in touch with my tax advisors

Disclaimer: I’m not a legal expert or tax advisor and the above should not be taken as legal advice. Contact me if you want me to help you find a tax lawyer or accountant for any of the situations described above.

This is a summary of current rules as of early 2026. Tax law changes frequently in Spain. When in doubt, consult a trusted tax advisor.

Click here to get in touch with my tax advisors

Filed under: Expat life

  • « Previous Page
  • 1
  • …
  • 6
  • 7
  • 8
  • 9
  • 10
  • …
  • 14
  • Next Page »

Latest Padel Match

Jean Galea

Investor | Dad | Global Citizen | Athlete

Follow @jeangalea

  • My Padel Experience
  • Affiliate Disclaimer
  • Cookies
  • Contact

Copyright © 2006 - 2026 · Hosted at Kinsta · Built on the Genesis Framework