Double tax treaties in Spain: how not to pay twice

A double tax treaty (convenio para evitar la doble imposición) is an agreement between two countries that shares out the right to tax the same income and decides what happens when both treat you as resident. If you live in Spain and have income in another country, or the other way round, it is what stops you paying twice on the same thing. This post is part of our guide to foreigners in Spain: NIE, Social Security and tax.

We look at what a treaty does, how it settles your residence when two countries claim you, how the IRPF deduction for international double taxation works and what the tax residence certificate is for. As an example we use the treaty between Spain and the United Kingdom, published in the BOE (Spain's official gazette) on 15/05/2014.

Why double taxation happens

Each country taxes its residents on everything they earn worldwide and non-residents on what they earn within its borders. Spain does exactly this: a resident pays IRPF (Spanish income tax) on all their income, wherever it was earned (article 2 of Ley 35/2006). A non-resident pays non-resident income tax on what they obtain in Spain (article 13 of Real Decreto Legislativo 5/2004).

If you are resident in Spain and rent out a flat in another country, that country taxes the rent because the flat is there. Spain taxes it because you live here. With no rule at all, you would pay twice.

What a treaty does

Once published in the BOE, a treaty is part of Spanish law (article 96.1 of the Constitution). The IRPF law applies subject to what treaties say (article 5 of Ley 35/2006). A treaty does three things:

1. It decides which country you are resident in when both treat you as resident under their own laws.
2. It shares out the right to tax each type of income. Some income can be taxed by only one country; other income by both.
3. It obliges the country of residence to remove the double taxation when both may tax, usually through a deduction.

It covers taxes on income and wealth. In Spain: IRPF, corporate income tax, non-resident income tax and wealth tax (article 2.3 of the treaty with the United Kingdom). It does not cover Social Security: contributions are governed by EU regulations or by separate Social Security agreements.

If both countries treat you as resident

Spain may treat you as resident because you spend more than 183 days here (article 9 of Ley 35/2006; see when you are tax resident in Spain). Your home country may too, under its own rules. The treaty breaks the tie with a list of tests applied one after the other. Article 4.2 of the treaty with the United Kingdom, which follows the OECD model convention, does it like this:

1. Permanent home. You are resident in the country where you have a permanent home available to you.
2. Centre of vital interests. If you have a home in both, in the country with which your personal and economic ties are closer.
3. Habitual abode. If that cannot be decided, or you have no permanent home in either, in the country where you habitually live.
4. Nationality. If you habitually live in both or in neither, in the country of which you are a national.
5. Agreement between the authorities. If you are a national of both or of neither, the authorities of the two countries settle it by mutual agreement.

Each treaty has its own wording, so check article 4 of the treaty with your country before taking anything for granted.

Who taxes each kind of income

Each type of income has its own article. Two examples from the treaty with the United Kingdom:

• Rent from property: the country where the property is may tax it (article 6). If you are resident in Spain, Spain also taxes it as your country of residence and deducts what you paid there.
• Salary: taxed in the country where you live, unless you work in the other one. If you do, that country may tax it too, with an exception for short stays: if you are there for no more than 183 days in a twelve-month period, are paid by an employer that is not resident there and the salary is not borne by a permanent establishment of the employer there, it is taxed only in your country of residence (article 14).

How not to pay twice: the article 80 deduction

When you are resident in Spain and a piece of income is also taxed abroad, IRPF lets you subtract what you paid abroad from your tax. This is the deduction for international double taxation in article 80 of Ley 35/2006. It applies whether or not there is a treaty. You deduct the lower of these two amounts:

• what you actually paid abroad in a tax identical or similar to IRPF or to non-resident income tax;
• the result of applying your Spanish average effective tax rate to the part of your taxable base that was taxed abroad.

The average effective rate is your net tax liability (cuota líquida) divided by your taxable base (base liquidable), times 100, to two decimal places and worked out separately for general income and savings income (article 80.2).

An example

Clara lives in Seville and is tax resident in Spain. She rents out a flat she owns in Manchester and makes net rental income of €8.000 in 2026, on which she pays the equivalent of €1.200 in the United Kingdom. In her 2026 Renta (annual income tax return) she declares the €8.000. If her general average effective rate is 25,00%, the part of her IRPF relating to that rent is €2.000. She deducts the lower amount: €1.200. In total she pays €2.000 on that rent: €1.200 in the United Kingdom and €800 in Spain.

If she had paid €2.500 in the United Kingdom, she could only deduct €2.000: the excess is not refunded in Spain.

The tax residence certificate

To use a treaty you have to prove which country you are resident in. The document is the tax residence certificate issued by your country's tax administration.

• If you are resident in Spain, you request it on the Agencia Tributaria's online office under "Todas las gestiones", "Certificados", "Censales", with Cl@ve, a digital certificate or an electronic DNI. On the form you choose the treaty country. According to the Agencia Tributaria, if you meet the requirements you get it immediately.
• If you are resident in another country and have income in Spain, such as rent, your country's certificate proves that you are not resident here and, if you live in the EU or EEA, lets you deduct expenses on modelo 210.

A special case: if you are on the Beckham law, you can request a Spanish tax residence certificate, but it only serves to apply a treaty in the cases the Ministry of Finance sets on a reciprocal basis (article 120 of the IRPF Regulation).

Common mistakes

• Not declaring in Spain what was already taxed abroad. If you are resident, you declare it here and then deduct what you paid abroad.
• Deducting more than allowed. The cap is what you would pay in Spain on that income.
• Assuming how your treaty breaks the tie. Each treaty has its own wording: yours is the one that counts.
• Thinking the treaty covers Social Security. It only covers taxes.