Guide for US citizens · 2026

Do you still pay US taxes on Spain's digital nomad visa?

FEIE, Foreign Tax Credit, self-employment tax, FBAR and Modelo 720 explained for US citizens tax-resident in Spain on a digital nomad visa.

Last reviewed 13 August 2026

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Quick answer

Yes. The United States taxes its citizens on worldwide income wherever they live, so moving to Spain does not end your US filing obligation — and spending more than 183 days a year in Spain generally makes you a Spanish tax resident too, taxed on worldwide income there. You are in both systems at once. What stops you being taxed twice on the same income is the Foreign Earned Income Exclusion ($132,900 for 2026), the Foreign Tax Credit and the US–Spain treaty. What catches people out is everything those tools do not cover: 15.3% self-employment tax, FBAR reporting above $10,000, and Spain's Modelo 720 for foreign assets above €50,000 per category.

The numbers that matter

FEIE, tax year 2026: $132,900
Self-employment tax: 15.3%
FBAR threshold: $10,000
Modelo 720 threshold: €50,000

Two tax residencies at once

Spain treats you as tax resident if you spend more than 183 days there in a calendar year, or if your main centre of economic interests is in Spain. A Spanish tax resident is taxed on worldwide income.

The United States taxes citizens and green card holders on worldwide income regardless of residence. There are only two countries in the world that do this, and the US is one of them. So from the moment you settle in Spain you have two tax authorities with a claim on the same money, and the job of the treaty and the credits is to divide it rather than double it.

The three tools that stop double taxation

Relief mechanisms and what each one actually covers
Mechanism	What it does	What it does not do
Foreign Earned Income Exclusion	Excludes up to $132,900 of foreign earned income from US income tax in 2026 (Form 2555)	Does not exclude self-employment tax, passive income, or reporting duties
Foreign Tax Credit	Credits Spanish income tax paid against your US liability (Form 1116)	Only credits tax actually paid — a lower Spanish bill means a smaller credit
US–Spain tax treaty	Allocates taxing rights between the two countries and relieves double taxation	Does not override the US saving clause: citizens remain taxable by the US

The most expensive misconception in this area is "the FEIE means I owe nothing, so I am done". The exclusion addresses income tax on earned income. It does not touch self-employment tax, and it does not remove a single reporting obligation.

Self-employment tax: the freelancer trap

If you work as a 1099 contractor or through your own business, US self-employment tax of 15.3% applies to net self-employment income, and the FEIE does not exclude it. Whether you pay it to the US or contribute to the Spanish system instead is governed by the totalization agreement, not by the exclusion.

In practice, an American freelancer living in Spain generally registers as autónomo and pays Spanish social security contributions, which under the agreement should remove the parallel US self-employment tax liability on the same earnings. Getting this wrong in either direction — paying both, or paying neither — is common and both errors are expensive.

Reporting: FBAR and Modelo 720

These are information returns, not tax bills, and people underestimate them because nothing is owed. The penalties are severe anyway.

FBAR (FinCEN Form 114): required if your foreign financial accounts together exceed $10,000 at any point in the year. A Spanish current account plus a savings account crosses that line quickly.
FATCA (Form 8938): a separate US filing with higher thresholds that vary by filing status and residence. Filing an FBAR does not satisfy it.
Modelo 720: Spain's declaration of assets held abroad, required when any category — accounts, securities, or property — exceeds €50,000. Your US brokerage account and your US home are exactly what this captures.
Modelo 721 covers foreign crypto holdings under a similar logic.

Modelo 720 has a reputation among expats that borders on dread. The original penalty regime was struck down by the Court of Justice of the EU in 2022 and Spain revised it, but the filing obligation remains and it is not optional.

What a realistic first year looks like

You file a US federal return, claiming the FEIE, the Foreign Tax Credit, or a combination.
You file a Spanish return: Modelo 100 under the ordinary regime, or Modelo 151 if you elected the impatriate regime.
You file FBAR, and Form 8938 if you are over the FATCA thresholds.
You file Modelo 720 if any foreign asset category exceeds €50,000.
If self-employed, you handle Spanish autónomo contributions and quarterly Spanish filings.
You may still have a US state filing obligation, depending on which state you left and how cleanly you severed residence.

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Frequently asked questions

Do I still pay US taxes if I live in Spain?

You still file, always. Whether you owe depends on your income and which reliefs apply: the Foreign Earned Income Exclusion covers up to $132,900 of foreign earned income in 2026, and the Foreign Tax Credit offsets Spanish tax you actually paid. Filing is not optional even when the result is zero.

Do I pay self-employment tax in Spain or the US?

Generally one or the other, not both, and the totalization agreement decides which. An American freelancer resident in Spain usually registers as autónomo and pays Spanish contributions, which should remove the parallel US 15.3% liability on the same income. The FEIE does not exclude self-employment tax, so this is not a question you can ignore.

What is Modelo 720 and do I have to file it?

It is Spain's information return for assets held outside Spain. You must file it if any category — bank accounts, securities and investments, or real estate — exceeds €50,000. A US brokerage account or a house you kept in the States will usually trigger it. Nothing is owed on the filing itself, but failing to file is penalised.

How much tax will I actually pay in Spain?

Under the ordinary regime, Spanish income tax is progressive with top marginal rates in the high forties depending on the autonomous community. Under the impatriate (Beckham) regime, employment income is taxed at a flat 24% up to €600,000. Which applies to you depends on whether you qualify for and elect the regime in time.

Does the FEIE mean I owe nothing?

No, and this is the most costly assumption Americans make abroad. The exclusion applies to income tax on earned income. It does not cover self-employment tax, it does not cover passive income, and it removes no reporting obligation — FBAR, Form 8938 and Modelo 720 all still apply.

Primary sources

Figures and legal references on this page come from the sources below. Requirements and thresholds change: check the current position before you rely on it.

This page is general information about how Spanish immigration and tax rules work, not legal or tax advice for an individual case. Every file Abroad Life submits is prepared and filed by a lawyer admitted to a Spanish bar.

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