One of the cultural differences that expats tend to find hardest to get used to in Spain, is how tax and other official administration is handled. Negotiating what may seem a sea of red tape is a lot easier with good accountants and other advisors.
We are Local Experts for Valencia and offer expat advice both directly and through other hand-picked expat service partners in the region.
There are many areas of official paperwork that need to be negotiated as an expat in Valencia and Alicante. For example, to become a permanent resident and receive the associated benefits you will need to fill in a number of forms and present them at the right offices. Once you are a permanent resident then you will be obliged to complete tax returns, which present their own challenges.
If you drive then most likely at some point you will need to swap your home country licence for a Spanish licence and if you bring your car from overseas then that will need to be registered in Spain too.
Even locals sometimes struggle to keep up with the bureaucracy in Spain, so as an expat your new life will be made a lot simpler if you find good accountants and advisors in Valencia. We personally know a wide range of reputable advisors throughout the region who can assist with all types of tax and administrative advice, we've detailed the areas they cover below and, for legal services, you may also want to check out our information about lawyers in Alicante and Valencia.
Generally speaking, if you are resident and working in Valencia, or have income from property or other sources, then you will be liable to pay income tax in Spain. Income from overseas is likely to be taxable too.
Taxes here are split between different levels of government and have differing scales, so understanding what you need to declare, when and where, is essential. There are often different ways to make your declaration too, for example, as an individual or a couple, so it's important to choose the method which is best for your circumstances or you risk overpaying tax.
Add the fact that everything needs to be filed in Spanish and you may quickly realise that you need a reliable, local, English-speaking tax accountant or advisor to smooth the journey and save you money.
Capital gains and inheritance tax
If you own property or other assets then you need to plan ahead for when you sell and make a profit, or if you die and pass it on to beneficiaries. The Spanish equivalents of capital gains tax and inheritance tax will almost certainly be payable. Preparing paperwork ahead of time can save you and your loved ones a lot of hassle and money.
Reputable lawyers in Valencia and Alicante can assist with property paperwork, preparing a Spanish will and more, and they usually work in tandem with accountants or other advisors, quite often in the same office, who can also help reduce the tax burden.
Tax office complaints and investigations
Tax offices in Spain - or Hacienda - have wide reaching powers and if you don't dot all your i's and cross all your t's then you will run the risk of having your tax affairs investigated in more detail, or you may find yourself unhappy with the decision they make and want to lodge a complaint.
As with all bureaucracy in Spain there are hard ways and easier ways to deal with such circumstances, and having a local tax advisor can save you a lot of time, money, effort and grey hairs.
There may be special tips they can give you and having an English-speaking advisor on your side can make a very frustrating process a lot more bearable.
Other administrative services
Many accountancy and legal firms can also assist with more general administrative tasks, such as getting you on the local council's register of inhabitants - empadronamiento; obtaining your Spanish ID number - NIE; advising on what type of residency you need and helping you request or update it with the national police; swapping your overseas driving license for a Spanish one; importing or exporting cars; and making legal translations for all manner of administrative tasks.
Some expats choose to manage this type of paperwork themselves and if you speak good Spanish and have a friend who has already been through the process then this can work fine. However, if you are still learning the local lingo and don't have friendly help, then hiring a professional English-speaking advisor in Alicante or Valencia is a wise decision to take.