Living in Spain with an income from the Netherlands

Living in Spain with income from the Netherlands: What you need to know

Many Dutch people dream of a sun-drenched life in Spain: wonderful beaches, rich culture and affordable housing. But what if your income continues to come from the Netherlands? Below we discuss the most important aspects to take into account: tax law, pension, insurance and practical tips for a carefree life under the Spanish sun.

Fiscal Residence Criterion

• Residence for tax purposes : You are a tax resident in Spain if you stay there for more than 183 days per calendar year.
• Averaging rule : If you continue to receive income in the Netherlands (e.g. AOW, dividend, rent) you may be faced with double taxation. However, Spain and the Netherlands have a tax treaty to prevent double taxation.

Important: Report to the Spanish Tax Agency (Agencia Tributaria) within three months of arrival using form 720 for Foreign Assets Declaration if you have a balance of €50,000 or more.

Which agencies to involve :

• Agencia Tributaria : The Spanish tax authority for filing your Spanish tax return (Model 720 and annual IRPF return).
• Dutch Tax Authorities : Report your emigration via the Dutch Tax Authorities (mijnbelastingdienst.nl) and request an international assessment service if necessary.
• Tax Advisor : Consider a tax advisor specialized in Dutch-Spanish tax treaties for guidance.

Income from the Netherlands

• Employment income : Wages from Dutch employment are taxed in the Netherlands, but can be considered for rate determination in Spain, subject to progression reservation.
• Pension and AOW : AOW is taxed in the Netherlands. Spain may not tax it in principle, but must include it in order to determine the Spanish rate.
• Rental and capital income : Rental income from a home in the Netherlands is taxed in the Netherlands. Spain also includes this, but provides an exemption.

Social security

• Health insurance : If you are no longer required to be insured in the Netherlands, take out Spanish health insurance (Seguridad Social). Consider additional private insurance for faster care.
• European form S1 : As a pensioner, you can participate in Spanish public healthcare free of charge with the S1 form.

Popular Regions: Costa Blanca, Costa Cálida and Costa del Sol

Each Spanish coastline has its own character and advantages for Dutch people with an income from the Netherlands:

• Costa Blanca : Known for its white sandy beaches and extensive promenades, with popular resorts such as Alicante and Benidorm. Affordable property, good amenities and an international community make this region attractive. Alicante airport offers many direct flights to the Netherlands.
• Costa Cálida : Literally 'warm coast' around Murcia and Cartagena. Slightly quieter and often cheaper than the Costa Blanca, with saltwater lagoons and thermal baths. Ideal for those who like water sports and want to be close to Murcia airport.
• Costa del Sol : Fantastic coastline with places like Malaga, Marbella and Fuengirola. Slightly more expensive real estate, but excellent medical facilities (private and public), luxury marinas and a wide range of international schools. Malaga airport is an important central point.

Practical Tips

• Banking : Open a Spanish bank account for everyday payments. Be aware of exchange rates and international transfer fees.
• Housing : Choose long-term rental or purchase. Take into account notary fees and transfer tax.
• Language skills : Basic Spanish helps with official matters. Take a course or use apps like Duolingo.

Living in Spain with a Dutch income offers many advantages, but requires good preparation in fiscal and legal areas. With the right steps you can optimally enjoy your Mediterranean life and financial security.

Feel free to contact us or sign up for a free consultation . CasaLasDunas is happy to assist you with expert advice and personal guidance.

Tel. no.: +34 965 724 489 / Email: contact@casalasdunas.com

Disclaimer: The content of this blog is intended as a first introduction to this topic. Because it is a complex topic, we recommend in all cases to seek professional support when doing your taxes.