Taxes are one of the most important and most misunderstood aspects of moving to Spain as an American. The key thing to understand is that moving to Spain does not end your US tax obligations. You will have tax responsibilities in both countries simultaneously.

As a US citizen you are required to file a federal tax return every single year regardless of where in the world you live - that obligation never stops. At the same time, once you spend more than 183 days per year in Spain you become a Spanish tax resident, and Spain taxes your worldwide income. Two countries, two sets of obligations, running at the same time.

Once you are a Spanish tax resident, Spain taxes your income on a progressive scale ranging from 19% to 47% depending on your total earnings. Your annual Spanish tax return called the Declaración de la Renta, is filed between April and June each year through Spain's tax agency, the Agencia Tributaria.

This is the most important tax conversation to have before you arrive in Spain - and the one most people find out about too late.

• A flat tax rate of 24% on income up to €600,000 - instead of progressive rates of up to 47%.
• You are taxed on Spanish-sourced income only - not your worldwide earnings.
• The benefit applies for the year you arrive plus five additional years - six years total.
• For a Digital Nomad Visa holder earning a US salary this can mean savings of €10,000 to €20,000 per year