Navigating taxes across multiple countries can be daunting, especially for high-net-worth individuals and expatriates. Different rules in Spain, elsewhere in the EU, and Switzerland mean your tax residency, income, wealth, and inheritance could all be taxed differently. This guide provides an overview of key cross-border tax considerations – from residency rules to wealth and inheritance taxes – in an informative, conversational tone.
Tax residency is the cornerstone of cross-border tax planning. Most countries use a “183-day rule” as a primary test – if you spend over half the year in a country, you’re generally considered a tax resident there. However, there are additional criteria and local nuances to be aware of.
You’re deemed a Spanish tax resident if you spend more than 183 days in Spain in a calendar year or if Spain is the base of your economic interests. There’s also a presumption that if your spouse and minor children live in Spain, you are a resident unless proven otherwise. Spain does not allow split-year residency – if you qualify as resident at any point, you’re treated as resident for the entire tax year. Learn more about the implications in our guide to moving to Spain.
Swiss tax residency is typically established by living in Switzerland with the intent to stay or via physical presence. Holding a Swiss residence permit generally indicates tax residency. Double tax treaties use “tie-breaker” tests to decide residency if you have connections to more than one country.
There’s no single EU-wide tax residency rule. Most countries follow the 183-day guideline and/or the “centre of vital interests” test, but definitions and counting rules differ. Double tax treaties can resolve dual residency conflicts and prevent double taxation.
Tax residents are subject to Spanish personal income tax on worldwide income at progressive rates, with top combined rates varying by region. Non-residents are taxed only on Spanish-source income at flat rates. Spain also offers the “Beckham Law” for qualifying new residents, allowing them to be taxed as non-residents for up to six years, with Spanish employment income taxed at a flat rate and most foreign income exempt. Explore our Spain expat tax services to see how we can help optimise your position.
Switzerland’s tax system is split into federal, cantonal, and communal levels. Rates vary widely by canton, but even the highest combined rates are generally lower than Spain’s. Residents are taxed on worldwide income (with some exceptions), while non-residents are taxed only on Swiss-source income. Special regimes, such as lump-sum taxation, can benefit wealthy individuals who don’t work in Switzerland.
Most EU states have progressive taxation, but many offer attractive expatriate regimes – such as Portugal’s Non-Habitual Resident programme or Italy’s flat tax on foreign income – to encourage relocation.
Spain imposes an annual wealth tax on residents’ worldwide assets and on non-residents’ Spanish assets. There’s a national exemption, additional allowances for a primary home, and regional variations. Recently, Spain introduced a “Solidarity Tax on Large Fortunes” for individuals with net wealth above €3 million. If you’re a property owner, our guide to selling property in Spain explains the tax implications before you sell.
All cantons levy a wealth tax on residents’ worldwide assets (with foreign real estate excluded but affecting the rate). Rates are generally low compared to Spain. Non-residents pay wealth tax only on Swiss-based assets.
Most EU countries do not have a general wealth tax, making this an important consideration for those deciding where to establish residence.
Inheritance and gift tax is levied on the beneficiary, with rates and allowances varying by region. Many regions have dramatically reduced or eliminated the tax for spouses and children. Tax applies if the beneficiary is resident in Spain or if the asset is in Spain. For property owners, see our Spanish inheritance tax guide for more detail
There’s no federal inheritance or gift tax. Most cantons exempt spouses and, in many cases, children. Other heirs may face tax, with rates depending on the canton and relationship to the deceased.
Rules vary widely, from no inheritance tax in Portugal for close relatives to high rates in France and Germany. Double-tax treaties are limited, so careful planning is needed for cross-border estates.
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Residents must report overseas assets worth more than €50,000 in certain categories via the Modelo 720 form. This obligation does not apply to non-residents or those under the Beckham Law.
Residents must declare all worldwide assets in their tax return for wealth tax purposes. Swiss banks participate in automatic information exchange, meaning foreign tax authorities can be informed of account details.
Most developed countries participate in the OECD Common Reporting Standard, enabling cross-border sharing of financial account information.
Cross-border taxation involving Spain, the EU, and Switzerland is complex but manageable with the right planning. By understanding residency rules, income and wealth tax implications, inheritance tax exposure, and reporting obligations, you can make informed decisions that protect your wealth and ensure compliance.
Private Client Consultancy specialises in helping high-net-worth individuals navigate these complexities. Whether you’re moving to the Costa del Sol, restructuring your assets in Switzerland, or balancing interests across the EU, our team can design a strategy that’s tailored to your lifestyle and goals.
Contact us today for expert cross-border tax advice and ensure your tax planning is working for you.
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