Spain's Exit Tax And How To Avoid It

Introduction

Spain introduced an exit tax in 2015. It applies to individuals who have been resident in Spain for at least 10 out of the previous 15 tax years, and who hold shares that meet certain criteria.

The exit tax is triggered when the individual leaves Spain and moves to another country. Importantly, Spain's exit tax is applied to the entire gain since the date the shares were acquired, not the gain arising from the date the individual acquired residence in Spain.

With appropriate planning, it is possible to avoid the exit tax by holding investments in assets that are outside the scope of exit tax.

Scope of Exit Tax

Exit tax applies to all unrealised capital gains derived from shares or interests in an entity that meet the following conditions: