Updated for the 2025 Spanish tax year – by Tacs4Expats, Lawyers & Accountants for expatriates in Spain since 2010.
Moving to Spain is an exciting step — but if you receive income abroad, your tax situation becomes more complex. Many expatriates living in Spain receive UK pensions, overseas salaries, rental income or dividends from investments.
All these must be declared correctly to the Spanish Tax Agency (Agencia Tributaria).
In this updated 2025 guide, we explain how to declare foreign income in Spain, how the Double Taxation Agreement with the UK works, and how to avoid common mistakes that can lead to penalties.
Who must declare foreign income in Spain?
You are considered a Spanish tax resident if:
- You spend more than 183 days per year in Spain, or
- Your main economic interests (business, employment or family) are based here.
As a Spanish tax resident, you are obliged to declare your worldwide income — not only what you earn in Spain.
That includes pensions, property income, dividends, and even income from part-time work abroad.
If you live in Spain but are non-resident, you still need to pay Spanish tax on income generated in Spain (for example, Spanish property rental).
What types of foreign income must be reported?
Foreign income includes:
- UK pensions and annuities
- Employment income from abroad
- Rental income from overseas properties
- Interest and dividends from foreign bank accounts and investments
- Capital gains from selling property or shares abroad
Each category is declared in a different section of your Spanish income tax return (Modelo 100).
Understanding the Spain–UK Double Taxation Agreement
The Double Taxation Agreement (DTA) between Spain and the UK ensures that the same income is not taxed twice.
- Some types of income (for example, government pensions) are taxed only in the UK.
- Other income (private pensions, dividends, rental income) is taxed in Spain, but you can offset the tax already paid in the UK.
This means you don’t pay tax twice — but you must still declare everything in Spain so that the correct credit can be applied.
How to declare your foreign income in Spain
You must include your worldwide income in your annual Spanish tax return (Modelo 100), usually filed between April and June each year.
When declaring foreign income:
- Convert all amounts to euros using the official exchange rate published by the Bank of Spain.
- Keep documentation (pension statements, payslips, bank interest certificates).
- If your total assets abroad exceed €50,000, you may also need to file Modelo 720 (informative declaration of assets abroad).
Important: even if no extra tax is due, failure to declare correctly can trigger penalties.
Common mistakes expats make
- Assuming that UK pensions taxed by HMRC don’t need to be declared in Spain.
- Using incorrect exchange rates or rounding income incorrectly.
- Forgetting to declare dividends or small bank interests abroad.
- Missing the deadline for Modelo 720 (typically March 31st).
- Relying on UK accountants who are not familiar with Spanish tax rules.
These errors are frequent — and easily avoidable with the right advice.
How professional advice helps
At Tacs4Expats – Lawyers & Accountants (Since 2010), we help expatriates all over Spain prepare and file their Spanish tax returns correctly.
Our bilingual team ensures:
- Proper application of the UK–Spain Double Taxation Agreement.
- Correct calculation of exchange rates and allowances.
- Filing of Modelo 100 and Modelo 720 when required.
We also assist in claiming refunds from HMRC for overpaid tax and reviewing your UK pension status to ensure full compliance in both countries.