To which my response is always “Nooooo!” and jump off a building. Well, PADRE 2014 is out and you can do your taxes in 63 steps. The easiest way to do your taxes is to first log onto the Agencia Tributaria website, log into the Renta 2014 website and generate the “borrador” (draft), which has all the information that the Spanish tax authorities had submitted to them.
Then download PADRE 2014 and install it on your computer. When you start your declaration you have the option to have it download all your information and automatically fill in the relevant information. The document you previously downloaded has a code on it that you can use to download the information that the Spanish tax authorities have on you.
For expats, the sucky thing about this program is that it doesn’t make it easy to declare income from outside Spain.
At this point, you throw up your hands in disgust and make an appointment (as of May 6th) and have them do it for you.
In case you still want to plow on, here’s how income from investments is treated in Spain:
| Product | Income | Sale |
|---|---|---|
| Bank deposits | RCM | --- |
| Bonds | RCM | RCM (Sale-Cost) |
| Mutual fund | Dividends of funds are NOT taxed if they are reinvested | GP (Sale-Cost) |
| Shares of companies | Dividends: RCM | GP (Sale-Cost) |
RCM = Rendimiento del capital mobiliario
GP = Ganancia patrimonial
The standard retention is 20% in Spain. Short term capital gains are integrated in your general income in 2014, which means that they can be taxed double what plain old interest would be.
If your investment already has a foreign retention, then you can include that in the retention it up to whatever the maximum you are paying in Spain. Some countries like Switzerland allow you have zero retention if you waive bank secrecy, which makes your taxes easier to figure out.
4 comments:
Thanks for the info.
What about ESPPs and stock options, how are they computed? I have heard horror stories ...
From what I've been told, the bargain element of ESPP and the difference between exercise and fair market value are taxed as regular income. The key is that they are taxed at time of exercise/purchase, not when they are granted.
There is an exemption of 12.000 euros if certain conditions are met (eg you hold the shares for more than three years), but these were tightened up for 2015, making many plans not eligible for the exemption.
What kind of horror stories?
Oh one other thing, the exemption is done by your employer prior to reporting the numbers to the authorities, so you don't need to do anything on your return, except report the capital gain once you sell the stock (which may be at the same time if you did an exercise/sell).
Simplifying for ESPP in US (qualified sale):
- You get taxed at your usual marginal tax bracket the difference: price at the time you acquire the stocks - discount price that you pay
- You get taxed at 15%: price of sell - price at the time you acquire the stocks.
You have to pay both the year where you sell the stocks. So I'm wondering if it's the same if you are resident in Spain when you sell them. And what happens if the year when you acquire them you are USA resident?
SO should be easier. you pay when you buy the stocks and when you sell them.
Other countries may have different regulations. One guy moving from England to USA could not figure out his SO, after sitting 3 hours with the IRS.
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