A. Dear Sir,
If you are a resident, taxes are assesed differently depending on whether you are salaried, self-employed or incorporate a company.
In the first two cases, taxes may go up to 60% for earnings over 72,000 € approx., and with a company your tax liability islimited to a corporate tax figure of 35% on the net gain. With earnings of over 42,000 € p.a., one should start considering incorporating a company in order to invoice the employer, when one is providing services on a self-employed basis. There is a tax band with different percentages applied to different incomes: currently, under three million pesetas of annual earnings your tax is almost inexistent. Taxes are paid annually and you can benefit from a number of tax relief deductions. Note that being a resident means that you are taxed in Spain for your worldwide income.
If you are non-resident, then you do not pay taxes in Spain other than those derived from an activity you are conducting in Spain at a given time. Other than that, you will two taxes on your property (Property income tax and Property wealth tax), and a local council rate.
This is just a brief summary of the system in Spain.
If you need more help let us know.
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