Do digital nomads in Catalonia have to pay tax?

Short answer: digital nomads will always have to pay taxes, like everyone else. In Spain, anybody who spends 183 days of the year or more living in the country is obligated to pay taxes there. 

The phenomenon of ‘digital nomads’ has grown massively in the past couple of years. The pandemic has forced people to work more and more from home or remotely, and this has given way to people deciding that that ‘home’ can be anywhere, no matter where the ‘work’ part is located. 

This is only possible if people’s work is based on computers, meaning equipment and a steady internet connection are all that’s really needed to clock in. So what’s stopping people from moving to warmer climates or cheaper countries in search of a better life experience? In many cases, nothing at all. 

In fact, the Barcelona City Council are even encouraging people to come to the Catalan capital and set up their home offices from there. They say there’s a desire to move abroad, experience new things, and explore fresh ways of working.

According to a survey carried out by the council’s Tourism Observatory, 68% of people are working remotely due to the current circumstances (24% usually work remotely), 77% of people wanted to change their place of residence temporarily, and 84% of those surveyed believed it was feasible to do so. 

For EU residents, coming to Catalonia to live and work is no problem, as this is guaranteed by European law. Non-EU residents will have slightly more difficulty with this, however, as they will have to apply for working visas, which can often be tricky to acquire and the process involves slow-moving bureaucracy. 

To speed up this process, the Spanish government has introduced a new draft bill aimed at providing a legal framework for digital nomads for the first time. This would cut down on the amount of bureaucracy for people who want to move to Catalonia or Spain and bring their work from a foreign company with them, but the law still has to go through the Spanish Congress and won’t come into effect until January 2023. 

Immigration, tax, and social security legislation moves slowly and is not really up to date with the current lifestyles of people who can bring their laptops anywhere in the world and do their jobs remotely.

How to live as a digital nomad in Catalonia

Anybody living here can register their residency with the local council. This is a process known as ‘empadronament’ in Catalan.

Foreigners living here can also apply for foreigners’ ID numbers from a police station, a form of identification vital for many procedures in Catalonia. However, as we covered in an episode of our podcast Filling the Sink in early January, an increasingly broken system is forcing many people to pay over the odds to obtain the requisite documentation, if they can even acquire appointments at all.

Anybody living in Spain for 183 or more days in the year is obligated to pay taxes here. 

As well as registering with the local council and getting a foreigner identity number, it is, therefore, compulsory to register before the Spanish tax authorities and social security system. 

This applies to EU citizens and non-EU citizens alike because when it comes to taxation in Spain the key point is residency, not the nationality of the taxpayer. 

The amount of tax you pay will be determined by your yearly income. 

For certain benefits such as social security and unemployment, Alejandro Guayta of DiG Lawyers, a law firm in Barcelona, explains that it will be possible in the vast majority of cases to sign up for these benefits without a problem. 

In most cases, there are coverage agreements in place between Spain and other countries, meaning it will be possible to register for social security, make use of these benefits, or move your pension plan to whichever country you’re from if you end up retiring there.

Guayta also highlights that in the event of any conflict of where a person should pay their taxes, then Spain has signed double taxation agreements with most other countries in the world, and these agreements will need to be referred to.

The draft law that has been presented by the Spanish government that would regulate the situation of digital nomads proposes a flat rate of 15% for Corporate Tax and in Non-Resident Income Tax.

However, at all times, digital nomads should refer to double taxation agreements between Spain and their country of origin to determine where their taxes should go.