Managing money when you earn in different currencies

Key rules

• Residence: Your spouse and dependent minor children living in Spain can make you a Spanish tax resident, even if you spend fewer days here.
• Worldwide income: As a resident, you are taxed in Spain on foreign salary, pensions, rental and investment income.
• Joint holdings: Each resident co-holder reports their own share of a joint foreign account or asset.
• Transfer costs: Specialist providers usually cost far less than a traditional bank for converting currency.

Both of you need to see the whole picture

If either of you earns or holds money abroad, both of you should know what comes in, in which currency, and what must be reported. Foreign income can create tax and reporting duties for the partner who does not earn it. Agree on a shared list of every foreign account, pension, property and income stream, and update it each year.

Foreign income is taxed in Spain if you are resident

Spanish tax residents are taxed on worldwide income. That includes foreign salary, pensions, rental income and investment income.

You count as resident if any of these applies:

• You spend more than 183 days a year in Spain.
• Your main centre of economic interests is in Spain.
• Your spouse and dependent minor children live in Spain. This is a presumption, so it can matter even if your own day count is low.

Each partner's foreign income is taxed under the same system. You can file separate returns or one joint family return. Ask a tax adviser to compare the two with your real numbers before you choose.

Double taxation is relieved either by a treaty between Spain and the other country or by a credit for foreign tax paid. The outcome depends on the country and the type of income, so check this for each income stream.

The optional "Beckham law" regime for eligible workers taxes only Spanish-source income plus a flat rate. It is not automatic, so you must apply for it. If one of you may qualify, decide together before you start.

Reporting foreign assets

If you are resident and any category of your assets abroad is worth more than 50,000 euros on 31 December, you must file Modelo 720. The categories are bank accounts, securities and real estate. The filing window is 1 January to 31 March of the following year. After the first filing, you file again only if a category has risen by more than 20,000 euros.

Each resident co-holder reports their own share of a joint holding, and the threshold test applies to each person. The duty also covers authorised persons and beneficial owners, so a partner who can use an account may have to report it even if the money is not theirs. Penalties for late or missing filings were reduced in 2022 and are now ordinary fixed fines. They are still worth avoiding. The timeline below shows the order of steps.

Keep conversion costs down

Moving foreign currency into Spain can cost far more than it seems.

• Traditional Spanish banks usually add a margin of roughly 1% to 4% over the mid-market rate. They often charge a fixed fee of about 5 to 30 euros for an incoming international transfer, and the sending bank may charge too.
• Specialist transfer providers typically charge about 0.3% to 1.5% all-in for major currencies. Currency brokers can give better rates on larger amounts.
• Euro transfers within SEPA are usually free or cheap.

Compare live quotes before each large transfer. Rates change often.

Decide who can do what

Agree in advance who can move money, who can convert it and above what amount you both approve. Make sure both of you can log in to, or see statements for, each foreign account. That way neither of you is surprised by a tax bill or a missed declaration if something happens to the other.

The questions in the FAQ below cover partner income, joint accounts and conversion costs.

Timeline and deadlines

• Count your days in Spain and check where your family lives: Throughout the year; more than 183 days in Spain makes you a tax resident

• Value your foreign accounts, securities and property at 31 December: On 31 December each year

Frequently asked questions

Does my partner's foreign salary or pension count for Spanish tax?

Yes, if your partner is a Spanish tax resident, their foreign salary or pension is taxed in Spain like any other income. Residence applies if they spend more than 183 days a year in Spain, if their main centre of economic interests is here, or by presumption if their spouse and dependent minor children live in Spain. Tax paid abroad is usually relieved through a treaty or a foreign tax credit, depending on the country and type of income.

Do we each have to report foreign bank accounts if we hold one jointly?

Yes, each resident co-holder reports their own share of a joint foreign account, at the percentage they own, if a category of assets abroad is worth over 50,000 euros at 31 December. The declaration, called Modelo 720, is filed between 1 January and 31 March of the following year. Later filings are needed only if a category rises by more than 20,000 euros.

How much does it cost to convert foreign income into euros?

Traditional Spanish banks typically add a margin of roughly 1% to 4% over the mid-market rate, plus about 5 to 30 euros for an incoming international transfer. Specialist transfer services usually charge about 0.3% to 1.5% all-in for major currencies.