The Spanish Solidarity Tax for High Net Worth Individuals

The Spanish Solidarity Tax for High Net Worth Individuals

The Spanish Government has approved a “Temporary Solidarity Tax” for High Net Worth Individuals.

This Tax was presented by the Socialist Party, and supported by the communist party, called Unidas Podemos.

There is a new tax for non-resident investors and owners who are worth in excess of 3 million euros. Around 23,000 people are subject to this tax currently in Spain. [Source: Idealista]

Under the new tax, non-resident investors will be obliged to pay taxes according to the following brackets, set according to net worth:

First tranche: 1.7% tax for assets between 3 and 5.34 million euros.
Second tranche: 2.1% tax for assets between 5.34 and 10.69 million.
Third tranche : 3.5% tax for assets over 10.69 million.

These sections coincide with those of the Resident Wealth Tax. In essence, non-residents are now taxed as if they were residing in Spain.

However, residents in Spain are taxed by “personal obligation”, for all their worldwide assets, while non-residents, are taxed by “real obligation”, and only on the assets and rights that they own in Spain. This means that non-residents cannot reduce the tax base available in the Wealth Tax regulations.

Many of the experts consulted, think this is killing the goose that lays the golden eggs, expelling investors from Spain, and, ultimately, creating very significant damage to our economy.

We are receiving a lot of inquiries about this new tax, and we are at your disposal to explain the rule in detail.

November 2022