Your IRPF: retención & modelo 130.

IRPF for expats: retención, modelo 130 and your home country

As a foreigner running a business in Spain, your income tax (IRPF) works the same mechanically as for locals — but two things matter more for you: whether you're a Spanish tax resident, and how Spain interacts with your home country's tax.

Retención vs. modelo 130

Invoice Spanish companies and they withhold 15% (7% when you're new) and pay it to Hacienda for you. Invoice individuals — or clients abroad, which is common for expats — and there's no withholding, so you file modelo 130 quarterly yourself, paying 20% of your net profit. Many expats with foreign clients fall mostly into the modelo 130 path.

Residency and double taxation

If you spend more than 183 days a year in Spain you're generally a Spanish tax resident and declare worldwide income here. Double-taxation treaties usually prevent you being taxed twice on the same income, and the Beckham Law may let qualifying new arrivals be taxed at a flat rate on Spanish income for several years — worth asking a professional about before you register.