Investment income and capital gains

It is for people who are thinking about moving to Spain, planning the move, or already living there, and who hold investments. After reading, you will know how your portfolio is taxed and which decisions make a difference.

Crypto, rental income, pensions, the Beckham regime and corporate tax are covered elsewhere.

Start with "How Spain taxes interest and dividends (savings income)". It sets out the savings scale, which the other pages build on. From there, go to the pages that match what you own, such as foreign dividends, capital gains, funds and ETFs, losses, or a foreign company.

Key rules

• Savings tax rates: Interest, dividends and gains are taxed on the savings scale: 19% up to €6,000, 21% from €6,000 to €50,000, 23% from €50,000 to €200,000, 27% from €200,000 to €300,000, and 30% above €300,000.
• Loss carry-forward: Net investment losses can be carried forward for 4 years, and cross-offset between income and gains is limited to 25%.
• Two-month rule: A loss is not counted if you bought the same security within two months before or after the sale for listed securities, or one year for unlisted ones.
• Foreign assets report: You must report foreign assets if a category is worth more than €50,000 on 31 December, between 1 January and 31 March.
• Withholding: Banks and companies withhold 19% on dividends and bank interest, and you get credit for it in your return.
• Fund redemptions: Gains from redeeming funds have no withholding, so you declare and pay them in your return.

Investment income and capital gains: the whole process, step by step

• Work out whether you are a Spanish tax resident for the year you arrive, and how income from before the move is treated (read: Cost basis and exchange rates for investments bought before you moved): In your year of arrival, before you file

• Sort your interest, dividends and gains into the savings scale and see the rates (read: How Spain taxes interest and dividends (savings income)): Before you prepare your return

• Calculate gains on shares and funds, selling the oldest units first across all your brokers (read: How capital gains on shares and funds are calculated in Spain): When you sell, and again when you prepare your return

• Before selling at a loss, avoid buying the same security back: a loss is not counted if you bought it within two months before or after the sale for listed securities, or one year for unlisted ones (read: Using investment losses against gains in Spain): Two months before and after a sale of listed securities; one year for unlisted ones

• Claim foreign tax withheld on dividends as a credit in Spain, and reclaim any excess above the treaty rate from the source country (read: Foreign dividends: Spanish tax plus tax already withheld abroad): Credit on your annual return; foreign reclaims commonly within two to four years of the payment, depending on the country

• Report foreign accounts, securities and property if a category is worth more than €50,000 on 31 December (read: Spanish broker or foreign broker: who reports and who withholds): Between 1 January and 31 March

• Carry unused net losses forward, with cross-offset between income and gains limited to 25% (read: Using investment losses against gains in Spain): For the next 4 years, oldest losses first

• Consider long-term savings products such as PIAS and SIALP if you want to hold money for many years (read: Insurance-based savings and unit-linked policies in Spain (seguros de ahorro)): A PIAS needs at least 10 years; a SIALP needs 5 years

Documents you may need

Identity and residence

• Your Spanish residence certificate — Foreign dividends: Spanish tax plus tax already withheld abroad

Translations and legal papers

• A translation of any foreign-language document — Cost basis and exchange rates for investments bought before you moved

Other documents

• Form 8938 — Foreign dividends: Spanish tax plus tax already withheld abroad, US citizens in Spain: PFIC rules and dual investment reporting
• Broker statements and transaction confirmations — Cost basis and exchange rates for investments bought before you moved
• Interactive Brokers — Spanish broker or foreign broker: who reports and who withholds
• Trade Republic — Spanish broker or foreign broker: who reports and who withholds
• Form 8621 for each PFIC — US citizens in Spain: PFIC rules and dual investment reporting
• Annual account statements from your broker or bank — Cost basis and exchange rates for investments bought before you moved

Investment income and capital gains: questions that cross several articles

Which of my investment income is taxed on the savings scale?

Dividends, bank interest, fund and share gains, and most capital income from insurance are taxed on the savings scale, while work, business and rental income are not. The rates run from 19% up to 30% above €300,000. Read How Spain taxes interest and dividends (savings income) for the full scale.

Is tax withheld when I redeem a fund?

No, a Spanish fund redemption by a resident has no withholding, while Spanish dividends and bank interest are withheld at 19%. The withheld amount is credited against your final tax bill. Read How Spain taxes interest and dividends (savings income), then How capital gains on shares and funds are calculated in Spain.

Can I get back all the tax withheld on my foreign dividends?

Not through Spain: the Spanish credit is limited to the treaty rate, and any excess withheld abroad must be reclaimed from the source country's tax authority. Unused credit can be carried forward four years.

Which shares count as sold first if I hold the same fund at several brokers?

The oldest units are sold first across all brokers, because the same security with the same ISIN is pooled regardless of account. This matters for gains and for the loss rules. Read How capital gains on shares and funds are calculated in Spain and Using investment losses against gains in Spain.