Question
I’m American and have lived in Spain for five years. I haven’t been able to figure out how to avoid double taxation before now, so I’ve been paying twice!
Today, the for the first time, my US software has a box to check that I’m a tax resident of Spain and therefore do not pay the US, hallelujah! The agreement that permits this went into effect April 1, 1988, is the only thing I know about it.
They also say I need to get a document from Spanish Social Security proving tax residency in Spain.
I live in a very small city with few Americans, so I think when I approach the Seguridad Social office, they won’t know what I’m talking about. Does anyone have experience getting a document like this? What would it be called?
Also, can I check the box and file and worry about this document later? I don’t want to get any of this wrong….
Answers
These are the answers of some Facebook group members:
“You should NOT have been paying double taxes and you can file for tax adjustments for the past few years. Find and pay a decent US accountant.
I suspect what you’re referring to right now is the Social Security part, because you’re a freelancer? If you pay SS in Spain, you don’t have to pay the employee or employer share of SS in the US.
But on regular income taxes, too, you shouldn’t have to pay twice. There is either the FEIE or the foreign tax credit, for your income taxes. The former has some rules and such and the latter is pretty basic, you get a credit for whatever you paid towards Spanish taxes to use towards your US tax liability.
Anyway for the SS certificate you need the INSS, I believe. It’s a certificate under the “totalization agreement” that verifies you’re paying into Spain SS and thus don’t have to pay into the US SS.”
“Here is the link to Agencia Tributaria procedure to obtain the certificate: https://sede.agenciatributaria.gob.es/Sede/procedimientoini/G305.shtml “
“There has been a tax treaty between both countries since 1990 and amended again in 2013. There is no double taxation. You have to file taxes with both countries… Usually Spain first and then the US. The US gives you full credit for what you paid to Spain. Typically you pay a bit more in Spain though.”
Members of a Spainguru’s Facebook group suggest that the individual should not have been paying double taxes and should seek a decent US accountant to file for tax adjustments for the past few years. The individual can also use the Foreign Earned Income Exclusion (FEIE) or the foreign tax credit to avoid paying taxes twice. In terms of obtaining a document from Spanish Social Security to prove tax residency, the certificate can be obtained through the INSS and is called the “totalizator agreement.” Agencia Tributaria also provides a fiscal residency certificate. Additionally, a tax treaty between the US and Spain has been in effect since 1990, which allows for the individual to file taxes with both countries and receive full credit for what was paid to Spain.
