Do Americans Pay Taxes in Spain AND the US?

This is one of the most common questions Americans ask before making the move to Spain, and the answer is yes — you likely do have to deal with both countries.

Becoming a Tax Resident in Spain
If you live in Spain for more than 183 days in a calendar year, you are considered a tax resident in Spain. And as a tax resident, you are obligated to file and pay taxes in Spain on your worldwide income. This catches some people off guard, but it is simply how Spanish tax law works.

Why the US Is Different
The United States is one of the very few countries in the world that requires its citizens to file taxes based on citizenship rather than residency. That means even if you live full-time in Spain and haven't set foot in the US in years, you still have an obligation to file a US tax return each year, just as you would if you were living stateside.

The Good News: There Is a Tax Treaty
Spain and the United States have a tax treaty in place specifically designed to prevent Americans from being taxed twice on the same income. This treaty, combined with tools like the Foreign Tax Credit and the Foreign Earned Income Exclusion, can significantly reduce or even eliminate what you owe the IRS after you have already paid taxes in Spain.

The general approach is to file your Spanish taxes first, and then use those credits and exclusions to offset your US tax liability. It is also worth knowing that some Americans relocating to Spain qualify for Beckham's Law, a special tax regime that caps your Spanish income tax rate at 24% for up to six years — which changes the calculation considerably.

The Most Important Thing to Remember
Even if you end up owing little or nothing to the US government, filing your American tax return every year is not optional. The IRS still expects a declaration, and the consequences of not filing can be serious. Think of it as a yearly formality that comes with being an American abroad.

If you are planning a move to Spain, working with tax professionals who understand both systems is well worth the investment. The rules are manageable once you know them — but getting the setup right from the start saves a lot of headaches later.