Getting paid by foreign clients into a Spanish account

Terms used

• SEPA — SEPA is the euro payments area, where euro bank transfers between participating countries work like domestic ones.
• IBAN — The IBAN is your international bank account number, which clients need to send you a transfer.
• Autónomo — An autónomo is a self-employed person registered to work for themselves in Spain.
• Gestor — A gestor is a professional adviser who handles tax and administrative filings for individuals and businesses.
• AEAT — The AEAT is Spain's tax agency.
• Modelo 720 — Modelo 720 is a declaration of assets held abroad, such as accounts, when a category exceeds 50,000 euros.
• Modelo 721 — Modelo 721 is the declaration of virtual currencies held abroad, equivalent to Modelo 720.

Key rules

• Euro SEPA payments: Euro transfers from SEPA countries are normally free or cost the same as a domestic transfer.
• Foreign currency: The cost depends on the receiving option and its exchange margin, so choose the one that loses least in conversion.
• Spanish bank conversion: Spanish banks usually add a markup and commissions, so they tend to cost more than multi-currency accounts.
• Tax: Money from abroad is invoiced and declared in your normal VAT and income tax returns.
• Modelo 720: Payments into a Spanish account do not trigger it, but an account held abroad may.

Ask for euros when the client is in a SEPA country

Euro payments from SEPA countries are the cheapest way to get paid. Receiving one is normally free, or costs the same as a domestic transfer. Most Spanish banks do not charge for incoming SEPA transfers, though some apply a small fee on certain accounts. Intermediary fees should not be taken off the amount, because SEPA transfers use a shared-charges option.

So where you can, put your Spanish IBAN on the invoice and ask the client to pay in euros.

Foreign currency: the exchange margin is the cost

When a client pays in dollars, pounds or another currency, the main cost is the exchange-rate margin. You have three ways to receive it:

• Your Spanish bank account. The money is converted to euros, usually with a built-in markup plus commissions. This is normally the most expensive option.
• A multi-currency account such as Wise Business, Revolut Business or Payoneer. You get local account details in currencies like USD, GBP and EUR, can hold balances, and convert at lower margins close to the mid-market rate.
• A payment platform such as PayPal, Stripe or a marketplace. These can settle in several currencies, but they charge their own conversion fees. PayPal tends to be at the higher end.

Pick the option with the lowest total cost for your usual amounts. Margins depend on the provider, amount, currency and plan, and change often. Before you choose, put a sample amount into each provider's published fee calculator and compare what you would actually receive.

Also check each provider's limits. They vary with your verification level, and some providers restrict certain countries or activities.

Tax: foreign income is still declared

Getting paid from abroad does not trigger a special declaration for a freelancer (autónomo). Invoice every payment and declare it in your normal VAT and income tax returns. Cross-border services can have different VAT treatment, so ask your gestor how to invoice each client.

Payments received in a Spanish account do not trigger Modelo 720. A multi-currency account held with an entity abroad may count as a foreign account, so check with your gestor whether Modelo 720 applies to you. It applies when the total in a category of foreign assets is over 50,000 euros on 31 December. Modelo 721 is the equivalent for virtual currencies held abroad.

Spanish banks report to the tax agency, the AEAT, on accounts and sometimes on cross-border transfers. Single cross-border payments over 50,000 euros may also need a declaration to the Bank of Spain in some cases, so ask your bank or gestor before a large payment.

The checklist and the questions below cover the steps and common doubts.

Checklist

• Ask clients in SEPA countries to pay in euros, since euro SEPA transfers are normally free or cost the same as a domestic one.

• Read your bank's tariff schedule for any fee on incoming transfers on your account.

• Decide how to receive foreign currency: your Spanish bank, a multi-currency account (Wise Business, Revolut Business or Payoneer), or a payment platform.

• Choose the option with the lowest total conversion cost, since Spanish banks usually add a markup and commissions.

• Check the limits and any country or activity restrictions of the provider you choose.

Frequently asked questions

Does a foreign fintech account trigger Modelo 720?

It can, if the account is held with an entity abroad and the total value in a category is over 50,000 euros on 31 December. Modelo 720 is a declaration of assets held abroad. Payments you receive in a Spanish account do not trigger it, so ask a gestor if you use a foreign account.

Does getting paid from abroad mean extra tax paperwork?

No, receiving international payments does not by itself mean a special declaration for an autónomo. You declare the income in your normal VAT and income tax returns, using the right VAT treatment for cross-border services.

Is PayPal a cheap way to get paid in foreign currency?

No, payment platforms like PayPal tend to be at the higher end for conversion costs. Multi-currency accounts such as Wise Business, Revolut Business or Payoneer usually charge less. Try each provider's fee calculator with a sample amount to compare the total cost.

Can a Spanish bank charge me for an incoming euro transfer from another EU country?

Normally no, because a euro transfer from another SEPA country should cost the same as a domestic one, and most banks charge nothing. Some apply a small fee to certain accounts or services. Intermediary fees should not be deducted from a SEPA transfer.