Spain: the expat regime lowers your Spanish tax, and can raise your US bill.
There is a US–Spain income tax treaty and a totalization agreement. Spain's special regime for inbound workers — widely called the Beckham regime — taxes qualifying income at a flat rate instead of the progressive scale. Less Spanish tax means a smaller foreign tax credit, and the US can end up collecting the difference.
Tax snapshot — Spain
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Sources: IRS Publication 54; IRS Publication 514; US–Spain income tax treaty and 2013 protocol; US–Spain totalization agreement; Article 93 of the Spanish Personal Income Tax Law on the inbound regime; the 2022 Court of Justice ruling on the Modelo 720 penalty regime; Rev. Proc. 2025-32; 31 CFR 1010.350. Checked 22 September 2026.
What that means on your return
This is the counter-intuitive one: a regime that saves you Spanish tax can cost you American tax, because the credit you claim on Form 1116 is limited to the foreign tax you actually paid. Whether the regime helps you overall depends on both returns, so both should be modelled before you elect it.
Modelo 720 is Spanish reporting of foreign assets. It is not a substitute for anything American: FBAR and Form 8938 are separate obligations with their own thresholds, and filing one does nothing for the other.
Spanish wealth tax is levied on net assets, not income. It is generally not creditable against US income tax, which surprises people who assume any Spanish tax reduces the American bill.
The inbound regime runs for the year of the move and the five following years, taxing qualifying Spanish employment income at a flat rate and generally leaving foreign-source income outside Spanish tax. It also changes your Spanish status: someone taxed under it is treated broadly as a non-resident, which affects the residence certificate and the treaty positions available.
The Modelo 720 penalty regime was found disproportionate by the Court of Justice of the European Union in 2022 and rewritten afterwards. The filing obligation itself remains — and it still does nothing for FBAR or Form 8938, which have their own thresholds and their own penalties.
If you are in Spain as a…
Questions I get about Spain
I am on the Beckham regime. Does that help my US return?
Often the opposite. It lowers the Spanish tax you pay, and the foreign tax credit is limited to tax actually paid — so the US may collect what Spain no longer does. Model both returns before electing.
Is Spanish wealth tax creditable against US tax?
Generally no. It is a tax on net assets rather than on income, so it does not belong on Form 1116.
Does filing Modelo 720 cover my FBAR?
No. Modelo 720 is Spanish, FBAR and Form 8938 are American, and each has its own thresholds and penalties. Most Americans in Spain with foreign accounts have all three running at once.
Does the inbound regime change my treaty position?
It can. Someone taxed under the regime is treated broadly as a non-resident for Spanish purposes, which affects the residence certificate and the treaty positions available — worth understanding before electing rather than after.
I already pay high tax in Spain. Do I still file a US return?
Yes, every year. Citizenship-based taxation does not care what you pay locally. The foreign tax credit usually removes the US liability, but the filing obligation stands, and FBAR and FATCA reporting stand with it.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Spanish bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Spain this year?
Fifteen minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 14 years in practice, 11 of them as an Enrolled Agent.