Tax Number In Spain: An Expats Guide
Are you an expat navigating the labyrinthine Spanish tax system? Wondering how to obtain your Spanish Tax Number (NIE) without losing your sanity?
Look no further! In this comprehensive guide, we’ll unravel the mysteries behind the NIE and empower you with the knowledge to conquer tax-related challenges in Spain.
Whether you’re a sun-seeking retiree or a budding entrepreneur, understanding the importance of the NIE is the first step towards securing your financial well-being in the land of flamenco and fiestas.
NIE – Número de Identificación de Extranjero
The NIE is a foreigner’s tax identification number, as the name implies. It is equivalent to the NIF number (see below) assigned to Spanish nationals.
[my-wp-abtesting id=”1947″]
Spaniards do not have NIE numbers because they are only assigned to foreign nationals. Your NIE number will be revoked and replaced with a NIF number if you ever apply for Spanish citizenship.
NIE numbers typically begin with the letter X, Y, or Z, followed by seven digits and then another letter. A common example would be X-1234567-Y.
If you wish to buy a house in Spain or do any kind of business here, you must first obtain an NIE number.
Your NIE number is unique to you and assists the Spanish tax authorities in keeping track of your fiscal activities, as well as your tax obligations.
Your NIE number will also be required when you file your taxes.
You will need an NIE number to start a business, register as self-employed, buy a property, get a mortgage, open a bank account, buy a vehicle, rent a property, get a job, study, connect utilities, or get a mobile phone contract, among other things.
It’s safe to say that you can’t conduct any business in Spain without one!
Whether you are currently in Spain or not will determine how you apply for your NIE. If you live outside of Spain and want to buy a home or apply for a residency or student visa, you can apply for an NIE at the Spanish consulate.
These are located in London, Manchester, and Edinburgh in the United Kingdom. In most cases, the NIE will take about two weeks to process.
NIF – Numero de Identificacion Fiscal
The NIF, like the NIE, is a tax identification number assigned to all Spanish nationals, legal entities, and non-legal entities.
The number is used to keep track of any financial procedures that the Spanish tax authorities may be interested in.
Anyone who is required to pay tax must provide this number when completing self-assessments, tax declarations, and any other form of communication with the tax administration.
The NIF number is made up of the DNI (Documento Nacional de Identidad) number of the Spanish national, plus an additional verification code.
Whereas the DNI is used to identify a Spanish citizen when engaging in any legal activity, the NIF is used when performing operations with tax or customs implications.
It is worth noting that NIF numbers are classified into several categories, which are as follows:
- NIF M – For foreigners, this is a temporary NIF. They may be assigned one if they are not required to use an NIE (they will be in Spain for less than three months) or as a temporary measure until an NIE is assigned.
- NIF K – Children under the age of 14 who live in Spain.
- NIF L – Spanish nationals who live outside of Spain.
- NIF N – This category may be assigned to any legal person who is not a resident of Spain and wishes to engage in tax-relevant financial transactions in Spain. This information can then be used in self-assessment, tax declarations, and correspondence with tax authorities.
A NIF number can be obtained from your provincial tax office or online.
If you are a foreigner and want to apply for a NIF N or NIF M, you must fill out the Modelo 030 form and make an appointment at your nearest Spanish consulate or Embassy.
CIF – Código de Identificación Fiscal
The CIF number is a tax identification number that is used to identify a Spanish company or legal entity.
The identities and their associated codes are listed below.
The CIF consists of a letter followed by eight digits, for a total of nine alphanumeric characters.
The first letter indicates the nature of the business. The next two numbers identify the company’s geographical location. The next five digits are distinct and are followed by a control digit, which can be either a letter or a digit.
A: Corporation
B: Limited liability company
C: Business Partnership
D: Limited partnership
E: Joint ownership, inheritance in abeyance, or other entity lacking legal character not specifically included in another code
F: Cooperative society
G: Association
H: Residents’ association under a horizontal property regime
J: Civil society
N: Foreign Entity
P: Local corporation
Q: Public institution
R: Religious institution
S: State Administration or Autonomous Community Institution
U: Temporary consortium or joint venture
V: Other types undefined in another code
W: Branch entity
B12345678 is an example CIF for a limited liability company. D87654321 could be the name of a limited partnership. As a result, the first letter will indicate the type of entity.
The CIF number serves as the VAT number as well.
It is worth noting that the CIF has been decommissioned since 2008 and has been merged with the NIF number, which is now used instead.
You can use your DNI or NIE number if you are going to be a sole trader or unincorporated partnership.
If, on the other hand, you intend to establish a limited company (S.L) or a separate legal identity, you must apply for a separate NIF number for your business.
Form Modelo 036 or 037 must be completed to apply for a NIF for a business. More information is available on the official website, which is linked below.
Who Needs A Tax Identification Number?
Anyone wishing to conduct any type of business or economic activity on Spanish territory must have a tax identification number.
Anyone who becomes a tax resident in Spain will require one.
Non-residents who want to buy a home in Spain will also need one. If the property is purchased in both names, each will require its own NIE tax number.
Those from the EU must apply for an NIE three months after establishing residency in Spain.
Those from outside the EU will receive their NIE when they apply for a residency visa.
How To Apply For A Spanish Tax Identification Number
There are three ways to apply for a tax number, depending on whether you live in Spain or not. They are as follows:
- Apply in person in Spain via a police station or provincial tax office
- Apply at a Spanish Embassy or Consulate in your home country
- Apply in Spain using a representative with power of attorney
If you plan to do any type of business or work in Spain, you must obtain a social security number.
Conclusion
Congratulations! You’ve now armed yourself with the vital information about the Spanish Tax Number (NIE). From navigating bureaucratic hurdles to ensuring compliance, you’re well-prepared to take on the tax challenges like a seasoned local.
Remember, with your NIE in hand, you open doors to a world of possibilities in Spain. So, embrace your expat journey with confidence and relish the sun-soaked adventures that await you in this vibrant and welcoming country.
Succeed Tax-wise!
Wait! There’s lot more that you might be interested in to follow: