Bank deposits and accounts abroad: how they are taxed and in which box they a...

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Interest rates are beginning to be felt in bank accounts, although not as universally as they should be. Although it is possible to find deposits at % interest, they are normally in foreign banks. The reason? The lack of banking competition in Spain due to the integrations that have occurred in the last years .

And when the time comes to take out deposits in foreign banks, many back out because it is not so obvious how to declare the profits obtained , even if we are talking about banks in the euro zone of the European Union, where there is no currency exchange.


Deposit taxation
The interest generated by deposits is considered, for personal income tax purposes, income from capital. Its taxation is different from that of work income, it is lower. And the taxes to pay are calculated as follows :

Income of up to , euros is taxed at %
Income of between , euros and , euros is taxed at %
Income exceeding , euros is taxed at %
For example, if we charge interest of , euros,   UK Email List  the first , euros are taxed at % and the rest at %, that is, we would have to pay taxes , x = , euros plus , x = euros, in total , euros (an average rate of %).



However, declaring these taxes is much easier since it is done automatically by the Tax Agency's Income WEB program . What's more, if the bank account is from a Spanish bank or a foreign bank with a branch in Spain, they are required to report the data and it will automatically appear in our draft, which will only have to be confirmed.

The problem comes when the foreign bank does not have a branch in Spain and we have to manually declare the income. But it is not very complicated either since you only have to report the interest as we will explain below and Renta WEB is in charge of calculating the taxes to be paid .

The box on the income tax return where you indicate interest
The box where you declare the income due to bank interest is , on page , section B: "income from movable capital" . By clicking on this box it allows us to enter the full income, withholdings and expenses. This is normally reported by Spanish banks and banks with a branch in Spain, but if we have an account in a foreign bank without a branch in Spain we simply have to register a new return and enter only the returns.

Movable Capital Returns
The withholding box must be left empty because if they have withheld a withholding from us, it has not been for the Spanish Government (if they did so then they would already be reporting the data to our Treasury draft and we would not have to do anything, just confirm the draft). Therefore , if any withholding has been made against us, it has been by a foreign State and must be declared elsewhere .

Interest Deposits
These foreign withholdings must be reported in box , under the heading "tax paid abroad" . Then Renta WEB is responsible for automatically calculating a deduction for double taxation so that we do not pay taxes twice for the same thing. The ideal, in any case, is to indicate to the bank where we have the deposit that we are residents in Spain so that they do not make any withholdings abroad.

Double taxation
The model
One last indication in case we have important deposits abroad: there is a legal obligation to report any declaration of assets abroad that exceed , euros. This is model .

In the past, this form was an ordeal and, in addition, if it was not done, the sanctions could be very large, but due to a ruling by the CJEU, which indicated that this inspection of assets posed obstacles to the free movement of capital within the EU. , now it's much simpler . However, it is a procedure that must be carried out if we have, for example, deposits for amounts greater than , euros in a foreign bank.