Hello there - does anyone know if Spain taxes awards for damages that someone would get if they win or settle a lawsuit because of personal injury (car accidents, other types of accidents)?  It would not be taxable in the United States.

Thank you in advance for any help!

Matt

Hi Matt,
Will watch this space with interest.  Mainly as I ‘hope’ one day to get a settlement for injuries received in an RTA.  ‘If’ I were legally obliged to declare it on my annual tax return, my income has been minimal (as I have been unable to work since), so I would hope that I fall under the threshold for tax.  Best to check with a gestor/accountant if you can.
Good luck.
sj

ps - I don’t know if it helps, but prior to RTA I was in receipt of unemployment benefit and sick pay & a small pay out from my previous employer (on a contracto fijo) - All of which I had to declare - then found out I had not been taxed at source and received a hefty tax bill as with my earnings up to that date it would appear took me over the lower band of tax!!!!

pps - I have been ‘advised’ off the record - If the tax office do not find you for any back tax unpaid within a 4 year period - the debt is then expired!!!!

Non-residents income tax liability

Non-residents are liable for this tax on any income arising in Spain, such as a money deposit with a Spanish bank, a property in Spain, or income derived of any business in Spain.

Property owners are taxed on their property income. The tax base is the property cadastral value (valor catastral), which can be found on any I.B.I receipt. Tax base rate is 25% of a 2% of the cadastral value.

Should you fail to pay this tax, you will be charged and penalized by the Spanish Tax Agency if you try to sell your property.