While the EU does its level best to discourage any economic prosperity, individual countries like Spain are still trying to recuperate from the pandemic, or at least weather this global recession.
October 2, 2022
By: Bobby Casey, Managing Director GWP
Spain is also one of the countries in the EU that just can’t seem to get out from behind the economic eight-ball. Some of their economic challenges are so significant you could see them from space!
Like most Western European countries, it’s trying to get back on its feet, but it’s also up against some ripples from the Russia-Ukraine war in terms of energy costs. This is on par with the rest of the union.
Where things start falling apart is how they are trying to juggle a Green Agenda, taxing the wealthy, while also trying to attract wealthy people to come and stay.
Spain’s Green Agenda and Tax Regime
Green Agenda Impact on Tourism
Spain’s environmental policies, part of the broader European Union Green Agenda, are predicted to have a significant impact on tourism.
According to a Deloitte report on the European Commission’s ‘Fit for 55’ plan:
“Spain could lose 11 million international tourists, billions in tourism revenue, and 430,000 jobs due to the Green Agenda’s impact on travel costs.”
Tourism is a $12 billion industry for Spain, and the rising cost of travel—driven by environmental measures like ticket taxes and sustainable aviation fuel—could discourage visitors.
Spain’s Wealth Tax
It never ceases to amaze me how governments will pursue a policy that inevitably hurts the poor, and when that happens, they immediately set their crosshairs on the rich.
- €3-5 million: taxed at 1.7%
- €5-10 million: taxed at 2.1%
- Above €10 million: taxed at 3.5%
Other taxes include:
- Increasing income tax for those earning more than €200,000 from 26% to 27%.
- Raising capital gains tax by 2% to 28% for those earning over €300,000.
- Approved windfall taxes on large energy companies and banks.
However, to offset this, Spain has reduced income taxes for those making up to €21,000 annually and temporarily lowered the sales tax on natural gas from 21% to 5%.
Digital Nomad Visa Spain: A Silver Lining
If the high costs of being a wealthy resident or short-term tourist sound unappealing, Spain’s Digital Nomad Visa might offer a more attractive alternative.
What is the Digital Nomad Visa Spain?
The Digital Nomad Visa Spain allows remote workers to stay longer in Spain, providing an opportunity for a more enriching experience while avoiding some of the financial burdens associated with short-term tourism.
Some of the proposed terms of the Digital Nomad Visa include:
- Available to people who work remotely for non-Spanish companies (only up to 20% of income can come from Spanish businesses).
- Applicants must be from outside the European Economic Area.
- Proof of at least one year of remote work experience and a contract of employment or, if freelancing, proof of employment by a company outside of Spain.
- Proof of sufficient income to be self-sufficient, expected to be around €2,000 per month, and proof of a residential address in Spain.
It’s still under discussion whether a criminal record check will be required.
Visa Duration and Benefits
- The Digital Nomad Visa is expected to be valid for 12 months with the option to extend the stay for up to five years.
- Spouses and children of applicants would also be eligible for the visa.
- Potential tax benefits for digital nomads, such as paying only 15% tax during the first four years of their stay, instead of the standard 24%+.
Ready To Become A Digital Nomad?
Spain’s digital nomad visa offers a fantastic opportunity for remote workers to experience the country’s beauty, culture, and lifestyle while benefiting from potential tax breaks. As the world continues to embrace the digital nomad lifestyle, opportunities like this are worth considering.
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